Now in a rational world, the news development should hardly have had any bearing for shareholders except for those whose accounts were frozen, but today’s episode highlights the nervousness that is brewing underneath the euphoric record highs of the market.
While Adani group later clarified that the NSDL had, in fact, not frozen the accounts of the three FPI investors and some of the stocks did manage to recoup a substantial portion of the intraday losses, one wonders if the current musical chairs in the market is sustainable. Investors have become too conscious of their own vulnerability as they remain perched at such stratospheric highs.
Keen observers of the market know that while this was a singular episode, the fact that fear index had one of its best days in June is a sign that a repeat telecast may not be that far away.
Moving on from the chaos of the Adani Group, let’s address another bizarreness that’s unfolding in one of the darkest alleys of Dalal Street.
ADAG is back in vogue
Shares of Anil Dhirubhai Ambani Group or Reliance Group surged today after Reliance Power informed the bourses that its promoter Reliance Infrastructure will be raising its stake in the company by effectively converting a portion of debt into equity through allotment of shares and warrants. The fact that a group as debt-ridden and troubled as ADAG has seen its shares triple and quadruple in the past 12 months is in itself a story of the bizarreness of this bull market.
That said, the market also has its own way of punishing excess; just ask .
Still not good enough
Shares of Bharat Heavy Electricals plummeted nearly 12 per cent as investors were jolted back into reality instead of the dreamy stories that have been woven around the stock over the past 12 months. The company reported a net loss for the March quarter and the analysts community was scathing in its assessment.
Some brokerages wrote off the chances of the company reporting a profit even in 2021-22, a year in which the economy is pegged to grow upwards of 14 per cent in nominal terms. Others doubted if the company’s rumoured divestment will ever see the light of the day when there are no signs that a turnaround is taking roots. While stories are powerful, their power can prove awfully feeble when battered by reality.
We wish you all a speedy recovery from the nauseating ride that we all went through today.
