Sebi checks for unusual trades in Adani stocks

Mumbai: The Securities and Exchange Board of India (Sebi) has asked stock exchanges to examine if there was any unusual activity in the stocks belonging to the Adani Group amid the plunge in their prices, said a person with direct knowledge of the matter.

Exchanges is in the process of putting together the trading activity that has happened in Adani companies over the last few days. They will submit their findings to the regulator.

"Any unusual trading will be examined by the stock exchanges," said the person quoted above.

Emails sent to Sebi, NSE and BSE went unanswered.

The Adani group has lost over ₹8.8 lakh crore in market capitalisation since January 25 after US short-seller Hindenburg Research released an adverse report on the group. The group has denied all allegations raised by Hindenburg Research.

On Thursday, the group's flagship company Adani Enterprises, declined 27% to ₹1,565, which is 52% lower than the offer price of ₹3,276 apiece. The stock has declined 55% since January 25.

The Hindenburg report was published just before the Adani Enterprises follow-on public offer (FPO) opened for subscription. Although the issue was fully bought, the company called off the FPO on February 1. Adani Total Gas stock plunged 56% in one week, whereas Adani Green and Adani Transmission lost nearly 45% during this period. Other six Adani stocks have declined between 20% and 40% since last Thursday.

In a separate case, Sebi is investigating some of the foreign portfolio investors (FPIs) who own shares of Adani Group companies to ascertain the ultimate beneficial owners.

The capital markets regulator is also probing whether minimum public holding norms are followed in letter and spirit in Adani group companies.

“The crux of the case is who are the ultimate beneficial owners of these few FPIs owning shares of Adani group companies,” said another person familiar with the development. “Since these FPIs are based out of multiple foreign jurisdictions. Indian regulators have to seek their foreign counterparts' assistance in getting information.”

Sebi is facing hurdles to get information about these funds that are domiciled overseas.

“It is challenging to get information under the PMLA (Prevention of Money Laundering Act) from foreign jurisdiction because of stringent privacy laws in some of these foreign countries,” the person said. “Some of the foreign countries do not even share bank statements.”

The Hindenburg report had alleged that “offshore shells and funds tied to the Adani Group” comprise many of the conglomerate’s largest public shareholders.