The recent Adani-Hindenburg episode brings to the fore some regulatory and operational issues in the securities markets and reinforces the need to revisit these. Post the Hindenburg report, share prices of most Adani group companies saw a downward spiral. The reason for this fall, apart from the firm’s debt concerns, was the quantum of promoter holdings that the company had pledged with various financial lenders to secure loans. Primarily, this free fall was triggered by debt concerns and then exacerbated due to the margin calls for Adani group stocks. A margin call is defined as a demand by a broker that an investor deposit further cash or securities to cover possible losses.
