Why is the Securities and Exchange Board of India (SEBI) not trying to protect retail investors by at least ensuring that suspect companies’ positions in key indices are reviewed, the Congress questioned on Monday, in the context of fluctuations in the share prices of Adani Group companies after the Hindenburg revelations.
This is the 15th edition of the Congress’s ongoing series of questions on the entire episode. The party on February 9 asked how Adani Enterprises was added to the National Stock Exchange (NSE) Nifty 50 index in September 2022 “despite questionable fundamentals, an excessive price-to-earning ratio and a tiny free float”.
It pointed out that following the Hindenburg report, MSCI, the world’s biggest stock index provider, announced that it would reduce the weightage of Adani Group stocks in its indices in the coming months. The second largest provider, S&P Dow Jones, stated that it would remove Adani Enterprises from its sustainability indices. The third largest, FTSE Russell, announced that it would make changes to the weightage of Adani Group companies in its indices effective 20 March 2023.
Against this backdrop, Congress communications chief Jairam Ramesh, in a statement, said, “Meanwhile the NSE has announced no review of Adani Enterprises’ position despite the dramatic fall in its price and global concerns over the true free float given allegations of money laundering and round tripping. Should the Securities and Exchange Board of India (SEBI) not be trying to protect retail investors by at least ensuring that suspect companies’ positions in key indices are reviewed?”
The party sharply criticised the February 17 announcement by the NSE to add four more Adani Group companies — Adani Wilmar, Adani Power, Adani Total Gas and Adani Enterprises — to the NSE indices.
“Why is the NSE adding insult to injury for the lakhs of investors who have lost money in Adani Group companies. Why is it being allowed to expose more investors to risky Adani stocks?” the party questioned. “Are you putting any pressure on the NSE to help your friends via the NSE Index Advisory Committee member who also serves on your Economic Advisory Council?”
