NSE puts three Adani Group companies under ASM framework amid Hindenburg row – What does this mean?

The group has incurred a $120 billion loss in market value since the Hindenburg report levelled a litany of charges – including fraud and share price manipulation. The Adani Group however insists that that allegations are baseless, and that it complies with all laws and disclosure requirements. What is an ASM framework? ASM or ‘additional surveillance measure’ framework is a pre-emptive measure taken to enhance ‘market integrity and safeguard the interest of investors’. Both the BSE and NSE have taken this step as per data available with the exchanges on Thursday.

Simply put, the stocks will now be subject to greater scrutiny and restrictions. Their listing under ASM is a warning of sorts for investors about unusual price movement. They cannot be pledged and are also forbidden from intraday leverages like cover orders and bracket orders. Measures such as reduction in price band, periodic call auction, and transfer of securities to Trade for Trade segment from time to time can also apply.

The parameters for shortlisting securities under ASM include high-low variation, client concentration, number of price band hits, close-to-close price variation and price-earning ratio. The move is not intended as adverse action against the concerned company or entity and is purely on account of market surveillance. Which Adani companies have been put under ASM framework? The NSE has put Adani Enterprises, Adani Ports and Special Economic Zone and Ambuja Cements under their short-term additional surveillance measure framework. What does it mean for these Adani companies? The NSE and BSE said that these three companies had satisfied the criteria for inclusion in short-term ASM.