Mumbai: The Bombay Stock Exchange (BSE) has taken a big decision on the shares of Adani Group’s 4 companies Adani Power, Adani Green, Adani Trans and Adani Wilmar. After the Hindenburg report, Adani group companies saw a steep decline. That is why the circuit limit for Adani Green and Adani Transmission was reduced to 10 percent on January 31. Later it was further reduced.
As of January-end, no Adani Group stock was within the 20 percent limit. The situation was such that Adani Group’s stock was in the lower circuit for several days. On the other hand, after the recovery, an upper circuit was seen in the stock for several days. This happened due to reducing the limits of the circuit. The lower limit helped to control the volatility in the stock.
Now BSE has increased the circuit filter for Adani Power from 5 percent to 20 percent. The circuit has been increased from 5 percent to 10 percent for Adani Transmission and Adani Green Energy. After the implementation of the new circuit limit from today i.e. from June 7, the shares can now be traded in a large amount. Apart from Adani Group, BSE has also extended the circuit filter for Kamdhenu and RVNL.
Shares on BSE have A, B, T, S and Z categories. Generally, investors do not have complete knowledge about each and every stock. The exchange has divided the shares into several categories based on their merits and demerits. Which includes basis like market cap, trading volume, results, profit, dividend, promoters participation. In which the A category shares are considered the most reliable by the investors. Which is selected mainly on the basis of market cap.
What does circuit mean in stock market?
According to the rules of Bombay Stock Exchange, the share limit is fixed to control the extreme fluctuations in the shares in the stock market. Shares cannot cross this limit in intra day trading. As for Adani Power, now the circuit limit for it is 20 percent. It means that shares of Adani Power can no longer fall more than 20 percent in a day and cannot rise more than 20 percent.