On June 6th, 2023, India's major stock exchange, the Bombay Stock Exchange revised circuit limits for 4 listed Adani group companies which would be affected from June 7, 2023. The 4 companies that saw revision are Adani Power, Adani Transmission, Adani Green, and Adani Wilmar.
Exchange told "As a part of a review of the surveillance action, the price band is revised in the various scrips. The revised price band will be effective June 7, 2023,”
Before the revision, the limit was set to 5% on Adani Wilmar Ltd., Adani Green Energy Ltd., and Adani Transmission Ltd, which after the revision has increased to 10%, while Adani Power Ltd. increased to 20%. The stock exchanges said they have adjusted the circuit limit for a total of 172 companies.
Circuit filters are percentage limits on scrip price movements in a single trading session, implemented by stock exchanges to curb excessive volatility and panic. There are two types: upper circuit filters, which set the maximum price increase limit, and lower circuit filters, which set the maximum price fall limit. The limits are based on factors like historical volatility and market conditions. Once a stock hits its upper or lower circuit limit, trading is halted, preventing panic selling and limiting extreme fluctuations in stock prices. Circuit filters provide stability and control in the stock market.
In Feb when the group was hit by Hindenburg report the exchange put Adani group companies under the short-term additional surveillance measure (ASM) framework. Earlier on May 15 and June 2, NSE and BSE removed Adani Total Gas Ltd, Adani Transmission Ltd, Adani Green Energy Ltd, and Adani Enterprise from the short-term ASM framework.
The four scripts whose limits were revised made a gap-up opening and are trading in green with a gain of 1% at the time of publishing.