Regulator Sebi is investigating market allegations against Adani group, whose 9 listed companies saw a 60 per cent decline in their market capitalisation between January 24 and March 1, Parliament was informed on Monday. Minister of State for Finance Pankaj Chaudhary said in the Lok Sabha that the volatility in the stocks of these companies have not had any significant impact at the systemic level. Nifty 50 declined by around 4.5 per cent during the same period.

The Securities and Exchange Board of India (Sebi), as the statutory regulator of securities markets, is mandated to put in place regulatory frameworks for effecting stable operations and development of the securities markets including protection of investors.

As per its mandate, it conducts investigations into any alleged violations of its regulations by any market entity, he said. “It is, accordingly, undertaking investigation into the market allegations against the Adani Group of companies. The nine listed companies forming part of Adani Group witnessed a decline of around 60 per cent of market capitalisation from January 24, 2023 till March 1, 2023 subsequent to the report published by Hindenburg Research,” Chaudhary said.

US-based short seller Hindenburg had in January made a litany of allegations, including fraudulent transactions and share-price manipulation, against Adani group, following which shares of group companies had taken a beating. The group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

Chaudhary said as per the Reserve Bank of India, banks are free to take credit related decisions based on internal assessment of the commercial viability of the loan within their board-approved policies and within RBI’s prudential guidelines. Further, RBI has informed that under the provisions of section 45E of the Reserve Bank of India Act, 1934, the central bank is prohibited from disclosing credit information, he said.

In a separate reply, Chaudhary said these listed Adani group companies are not part of Sensex and have a combined weight of below 1 per cent in Nifty.

The volatility in the stocks of these companies have not had any significant impact at the systemic level. Nifty 50 declined by around 2.9 per cent in the month of January 2023 and by around 4.9 per cent in the 2-month period of January and February 2023,” the minister said.

He said the pricing of individual stocks and variations, over or undervaluation, and the price risks borne by investors are determined by the dynamics of demand and supply.

The regulatory framework provides for surveillance mechanisms which are triggered in instances of volatility in share prices of specific companies, Chaudhary said.

In its order dated March 2, 2023, the Supreme Court has directed Sebi to conclude the ongoing investigations within two months. Chaudhary said the investigations pertaining to imports of power generation, power transmission and infrastructure (port & SEZ) equipment by Adani Group companies have been concluded by the Directorate of Revenue Intelligence (DRI) and the report has been submitted before the relevant judicial authorities.

As regards case pertaining to imports of Indonesian coal by Adani Group of companies, investigations by DRI have not reached finality as information sought from exporting countries through execution of Letters Rogatory (LRs) is under litigation.