Indian authorities seek to calm investors after Adani sell-off

Indian authorities have sought to calm investors after a sell-off in the shares of Adani Group companies over fraud allegations added to volatility in the country’s stock market.

Without naming Adani, the Securities and Exchange Board of India (SEBI) said that it was aware of “unusual price movement in the stocks of a business conglomerate” and it would examine and take “appropriate” action “if any information comes to SEBI’s notice”.

“SEBI has consistently followed this approach on entity level issues and would continue to do so,” it said.

India’s finance minister Nirmala Sitharaman said on Saturday that “the regulators will do their job”.

“Our macroeconomic fundamentals, our economy’s image — none of [it] has been affected,” she said.

Shares in companies belonging to the Adani Group, the industrial conglomerate owned by billionaire Gautam Adani, have lost around $100bn in value since short seller Hindenburg Research last month alleged that the group had engaged in stock manipulation and fraud.

Adani has adamantly denied the allegations.

The sell off forced the tycoon to call off a $2.4bn share sale in his flagship company Adani Enterprises and has sparked fears of wider contagion in Indian markets. Stocks such as Adani Enterprises and Adani Green Energy have lost around 50 per cent in value since Hindenburg’s allegations were published on January 24.

Saturday’s statements came the day after India’s National Stock Exchange decided to increase controls on trading in group companies Adani Enterprises, Adani Ports and Ambuja Cements, toughening margin requirements in order to curb short selling.

Analysts say that the selling across the group’s 10 listed companies has weighed down India’s otherwise buoyant Sensex index, which is up around 1 per cent over the same period.

India’s government has dismissed concerns that the group’s travails could hurt state-owned banks and insurers, which have built up exposure to Adani companies.

Investors and opposition parties have for days demanded that the government clarify whether it is investigating Hindenburg’s allegations, accusing authorities of protecting the tycoon due to his longstanding relationship with Prime Minister Narendra Modi.

The opposition Congress party called for nationwide protests against Adani on Monday.

India’s finance ministry said in 2021 that SEBI was probing some Adani companies over compliance, but authorities have not clarified the status of that investigation since.

In its statement, SEBI said it had “put in place a set of well defined, publicly available surveillance measures . . . to address excessive volatility in specific stocks”.