Measures in place to address excessive market volatility, says Sebi

The Securities and Exchange Board of India (Sebi) on Saturday said there are measures in place to deal with excessive volatility and it remains committed to maintain market integrity.

“During the past week, unusual price movement in the stocks of a business conglomerate has been observed. As part of its mandate, Sebi seeks to maintain orderly and efficient functioning of the market and has put in place a set of well defined, publicly available surveillance measures (including the additional surveillance measure framework) to address excessive volatility in specific stocks. This mechanism gets automatically triggered under certain conditions of price volatility in any stock,” said the Sebi in a statement.

This is the first time that the market regulator has issued a statement following the unprecedented crash in Adani group stocks triggered by scathing allegations made by US-based firm Hindenburg Research.

Sebi has begun examining the crash in Adani group stocks and is said to have increased the scrutiny of the Adani group and its investors.

“In all specific entity related matters, if any information comes to Sebi’s notice, then, as per extant policies, the same is examined and after due examination, appropriate action is taken. Sebi has consistently followed this approach on entity level issues and would continue to do so in future as well,” the regulator said.

“Sebi is committed to ensuring market integrity and to ensuring that the markets continue to have the appropriate structural strength to function in an uninterrupted, transparent and efficient manner as has been the case so far,” it further said.

Sebi said the domestic benchmark indices the Sensex and the Nifty have “demonstrated ongoing stability and is continuing to function in a transparent, fair and efficient manner.”

Two Adani group stocks are part of the Nifty, while Sensex has no presentation from the Adani group. The 10 listed firms belonging to the Adani group have lost over Rs 9 trillion in market value in just seven trading sessions.

Earlier during the day, at an event in Mumbai, Finance Minister Nirmala Sitharaman said the regulators are doing their job independently when questioned on the Adani group.

“The regulators will do their jobs. And regulators are independent of the government. They are regulators and they are independent, and they are left to themselves to do what is appropriate. And actually, for keeping the market and the markets regulated in prime condition. Sebi is the authority and it has the wherewithal to keep that prime condition,” she said.

So far, the Sensex and the Nifty have not seen much impact of the Adani group crash but the development has triggered fears of a contagion and concerns around India’s image in the minds of global investors.