Measures in place to address excessive volatility in specific stocks, says SEBI amid Hindenburg-Adani row

New Delhi [India], February 5 : Even as opposition has been pressing its demand for a Joint Parliamentary Committee (JPC) probe into the Hindenburg-Adani row, the lenders have said that their exposure to the conglamorate is within permitted limits while Securities and Exchange Board of India (SEBI) has asserted that it is committed to ensuring market integrity.
SEBI said that the Indian financial market as represented by Sensex and Nifty has demonstrated ongoing stability and is continuing to function in a transparent, fair and efficient manner.
In an apparent reference to the Adani group, the Securities and Exchange Board of India (SEBI) on Monday said "that unusual price movement in the stocks of a business conglomerate" has been observed during the past week and that it is committed to ensuring market integrity.
Adani group stocks had witnessed a crash following Hindenburg Research report.
SEBI said on a longer-term basis also, Indian markets have been viewed positively by investors.

A cross-country comparison of dollar-adjusted market returns with both peer and developed countries during the past three years till date, places "the Indian Market as a positive outlier," the regulatory body said.

"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 the orderly and efficient functioning of the market and has put in place a set of well-defined, publicly available surveillance measures (including the ASM framework) to address excessive volatility in specific stocks.
"This mechanism gets automatically triggered under certain conditions of price volatility in any stock," the statement said.
SEBI said that in all specific entity-related matters, if any information comes to its notice, then it is examined as per policies and appropriate action is taken after due examination.

"SEBI has consistently followed this approach on entity-level issues and would continue to do so in future as well. 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," the statement said.
On Wednesday, Adani Enterprises decided not to go-ahead with its fully subscribed Follow-on Public Offer (FPO), with the Group chairman Gautam Adani stating on Thursday that it would not be "morally correct" to go ahead with the Rs 20,000-crore share in the current market condition.
Finance Minister Nirmala Sitharaman, who addressed a post-budget press conference in Mumbai, said the regulators are independent of the government and they are left to themselves to do what is appropriate so the market is well regulated.
"This is not the first time that some FPO (follow-on public offering) is taken back. How many times that has affected the image of the country?" she said.
Reserve Bank of India had said on Friday that according to its current assessment, the banking sector remains resilient and stable.
The central bank had said it maintains a constant vigil on the sector and on individual banks with a view to maintain financial stability.
Without naming the Adani Group, RBI said in a statement that there have been media reports expressing concern about the exposures of Indian banks to a business conglomerate.

"As per the RBI's current assessment, the banking sector remains resilient and stable. Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy. Banks are also in compliance with the Large Exposure Framework (LEF) guidelines issued by the RBI," the statement said.
The central bank said it remains vigilant and continues to monitor the stability of the Indian banking sector.
State Bank of India (SBI) chairman Dinesh Khara had said the bank's total exposure amounting to Rs 27,000 crore in Adani Group is 0.88 per cent of its loan book.
"We have lent to Adani (group) for projects having tangible assets and adequate cash. They have met obligations...our total exposure to Adani group is 0.88 per cent as of December 31," he said at a press conference.
Khara added those loans were against assets or businesses that are cash-generating, and the bank does not see any challenge. "There's no cause for concern for us," he added.
Opposition parties forced adjournments in both Lok Sabha and Rajya Sabha over the Hindenburg-Adani group row on Thursday and Friday.
They have sought discussion over investment by LIC, Public Sector Banks, and financial institutions "in companies losing market value, endangering the savings of crores of Indians" following a report by US-based short seller Hidenburg Research which has made allegations against some companies of Adani group. The Adani group had termed the report "nothing but a lie".