ACC, Ambuja Cements hit multi-month lows as Adani Group ditched on governance concerns

ACC and Ambuja Cements, the companies that recently came under Adani Group’s stable, saw heavy sell-off on Friday as traders dumped the entire group amid concerns over corporate misgovernance and stock manipulation allegations made by US-based short-seller and research firm Hindenburg Research.

ACC shares tumbled 20% to a 21-month low of Rs 1,732.60 on the NSE, while those of Ambuja Cements plunged 25% to a 6-month low of Rs 345.15.

Traders added significant short positions to the February futures contract of both stocks. ACC saw a 21% rise in open interest to 3.36 million, and Ambuja Cements witnessed an 11% rise in open interest to 99 million.

Positioning in the options indicates that some more pain is left for Ambuja Cements, as traders have bought Rs 350-370 strike price put options, resulting in a multi-fold rise in their premiums.

Similarly, out-of-the-money put options of ACC were significantly bought, leading to a manifold surge in their premiums. Adani Group stocks faced a massive sell-off today, wiping out Rs 4 lakh crore in market capitalisations in just two days.

Shares of Adani Transmission, Adani Green Energy, and Adani Total Gas were locked in the 20% lower circuit. Adani Ports and Special Economic Zone hit a 2-year low, and Adani Enterprises a 5-month low. Describing Hindenburg's 32,000-word report as maliciously mischievous and unresearched, Adani Group threatened to take punitive action against the firm in both US and Indian courts.

The group believes the report is set to undermine its goodwill and reputation and sabotage Adani Enterprises’ ongoing Rs 20,000-crore FPO, the largest ever in Indian history.

The sell-off was not only seen in Adani Group stocks, but a spillover effect was there in the broader market as well. The Sensex and Nifty 50 dropped about 2% each and breached major support levels.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)