A majority of Adani Group stocks extended their sharp plunge in Thursday's trade as the selloff continued even after Gautam Adani's flagship company shelved its share sale. Adani Enterprises called off the follow-on public offer (FPO), despite the offer being fully subscribed.
Eight out of 10 listed Adani stocks (including ACC, Ambuja Cements and NDTV) slumped. ACC and Ambuja Cements advanced today, while others declined. Adani Enterprises plunged the most today and settled 26.50 per cent lower at Rs 1,564.70.
Considering today's low levels, the combined market capitalisation (m-cap) of the Adani Group stocks dived Rs around 8.80 lakh crore in six sessions to Rs 10.38 lakh crore from Rs 19.20 lakh crore (closing value of January 24).
Here are five reasons behind the crash that we know so far:
* Hindenburg
It all started with a report from US-based short seller. Hindenburg Research alleged that the Indian conglomerate had engaged in stock manipulation and accounting fraud over the last few decades. Adani Group, however, refuted the allegations as baseless.
* Credit Suisse
A Bloomberg report claimed that Swiss lender Credit Suisse had stopped accepting bonds of Adani companies as collateral for margin loans to its private banking clients.
* Citigroup
Citigroup's C.N wealth unit has stopped extending margin loans to its clients against securities of Adani Group, news agency Reuters reported quoting a source.
* SEBI
Market regulator SEBI is examining a recent crash in Adani Group shares and looking into any possible irregularities in a share sale by its flagship company, Reuters reported citing a source.
* RBI
The Reserve Bank has asked Indian banks for details of their exposure to Adani Group companies, Reuters reported quoting sources.
Meanwhile, Indian equity benchmarks traded on a mixed note in late-morning deals today. The benchmark BSE Sensex pack climbed, while the broader NSE Nifty index slipped as it constitutes two Adani Group heavyweights (Adani Enterprises and Adani Ports). Sub-indices Nifty Bank and Nifty PSU index fell 0.52 per cent and 0.92 per cent, respectively.
(With inputs from agencies)
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