Stocks are moved into the short-term or long-term additional surveillance framework by exchanges in order to warn investors of unusual movement in share prices. The stock exchanges place trading restrictions to curb volatility and potential losses to retail investors.
Such a move by the exchanges has been triggered by the sharp fall in the stock on Wednesday after the three-day winning streak. Intraday, shares of Adani Enterprises dropped as much as 8% to a low of Rs 2,425.35. The stock eventually ended 6% down at Rs 2,475.
In the last three sessions, the stock has gained over 37%, which helped it erase all the losses incurred since the release of the explosive report by US-based Hindenburg Research. From its 52-week low hit in early February, the stock turned a multibagger with more than 100% returns.
The sharp rally in the stock was because the Supreme Court-appointed panel to investigate into the allegations made by Hindenburg, did not find any regulatory lapse with respect to the stock price manipulation in Adani stocks.
While the apex court gave two more months to market regulator SEBI for investigating the matter, the initial findings in the report came as big relief for Dalal Street investors.
Further, GQG Partners, who in March, bought Rs 15,000 crore worth of Adani shares, raised the stake in the group by 10%. This news gave an additional boost to the stocks. In February, shares of Adani group companies were placed under surveillance following the rout triggered by the American short seller’s allegations. In less than a month, Adani stocks saw more than $100 billion erosion in the market value, leaving investors sagging.
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