Deliveries Rise In Two Adani Cos

As a result of a US short seller report on 24 January, almost half of the value destruction in ten listed group companies was destroyed through Adani Total Gas (ATGL) and Adani Transmission. Shares of these companies changed hands on 16-17 February, days after being locked at lower circuits.

The 10 listed stocks have been battered after Hindenburg Research released a report alleging accounting fraud and stock price manipulation against the ports to renewable energy conglomerate, which has vehemently denied any wrongdoing.

Adani Total Gas, which has seen investor wealth erosion of ₹3.2 trillion, witnessed 4,44,000 shares changing hands on NSE on Friday against the one-month average delivery volume of 3,79,000 shares. The delivery on Thursday was even higher at 1.75 million shares.

Adani Transmission, which saw ₹2.04 trillion of value destruction, saw 568,000 shares changing hands against the monthly average delivery of 459,000 shares. Thursday’s figure stands at 1.2 million shares. ATGL’s contribution to investor value destruction as a percentage of total loss in market cap stands at 30%, while that of Adani Transmission stands at 19.13%.

In the four days through Wednesday , ATGL witnessed only 60,000 shares changing hands while the Adani Transmission counter saw only 52,265 shares being exchanged on NSE.

These shares are in the long-term additional surveillance measures of NSE, which mandates a 100% trading margin, among others, to dissuade excessive speculation.

Adani Total Gas hit a 52-week low of ₹973.75 while Adani Transmission posted a 52-week low of ₹918.65.

The margin has been increased from 30-40% to 100%, reducing the leverage that day traders enjoyed after the Hindenburg –induced stock meltdown.

Besides the margin increase the price band has also been halved on these stocks to 5%.

Both the stocks hit their 52-week lows, a day after global index provider MSCI deferred a review of their free floats from February 28 to next month. The review had resulted in weighting cuts in both the stocks that would have caused foreign fund outflows of $255mn in both the stocks.