NSE removes Adani Ports, Ambuja Cements, Monarch Networth Capital from surveillance framework

The National Stock Exchange has on Friday removed Adani Ports and Special Economic Zone and Ambuja Cements from the additional surveillance framework with effect from February 13.

NSE's move comes days after the exchange had placed three Adani group stocks–Adani Enterprises, Adani Ports, and Ambuja Cements under additional surveillance measures (ASM) to curb excessive volatility post US short seller Hindenburg Research's report, which battered the conglomerate's listed stocks.

The NSE also removed Monarch Networth Capital, Heranba Industries and RKEC from the framework. However, Adani Enterprises, the conglomerate's flagship arm, continues to be under the ASM framework.

"There shall be Additional Surveillance Measures (ASM) on securities with surveillance concerns based on objective parameters viz. Price / Volume variation, Volatility etc," said NSE on its website to explain the measure.

Monarch Networth Capital was one of the 10 underwriters of Adani Enterprises' aborted Rs 20,000-crore share sale.

The Ahmedabad-based brokerage was responsible for "non institutional marketing", according to the Adani share sale document. Hindenburg had flagged Monarch in its research report for conflict of interest.

The move by the stock exchange, earlier this month, came after a rout in the shares of the billionaire Gautam Adani's group companies in the aftermath of the scathing report by Hindenburg Research.

Adani Group's market losses swelled to more than $100 billion, sparking worries about their potential systemic impact.

Adani Group has denied the short-seller's accusations, saying the allegation of stock manipulation had "no basis" and stemmed from an ignorance of Indian law.

Moody's downgraded on Friday the ratings outlook for some Adani Group companies, while MSCI said it would cut the weightings of some in its stock indexes, the latest blows for the Indian conglomerate plunged into crisis by a short-seller's report.

On Friday, Moody's downgraded its ratings outlook to negative from stable for Adani Green Energy; the Adani Green Energy Restricted Group, which represents some of its other units; and two subsidiaries of Adani Transmission.

"These rating actions follow the significant and rapid decline in the market equity values of the Adani Group companies following the recent release of a report from a short-seller highlighting governance concerns in the group," Moody's said.

MSCI reassessed the size of some Adani companies' free floats, having determined there was "sufficient uncertainty" surrounding some investors in Adani companies. It embarked on the review after feedback from market participants.

The index provider's action could lower India's weight in MSCI's Asia or Emerging Markets indexes by 20 basis points to 30 basis points, which could result in $1.7 billion of outflows by tracker funds, Goldman Sachs analysts said in a note.

With inputs from Reuters