Are electoral bonds making stock markets jittery?

The fall in the stock markets and the Supreme Court order to SBI may be linked, as per market veterans who wish to remain anonymous. It seems that the stock market is apprehensive about the revelations that may surface on the back of electoral bond offered by corporates to Indian political parties.

Stocks of Power Grid Corporation, Coal India, Adani Enterprises, Adani Port, and NTPC took a massive hit today. Nifty fell by 338 points, 1.51%, due to the slide in the heavyweight stocks.

Power Grid lost 7.31%, Coal India slide 7.18%, while NTPC dropped 6.45% today.

The stock price of SBI has been consistently nose-diving since the bank expressed its inability to furnish the details of electoral bonds and got reprimanded by the apex court. Since March 7, SBI has fallen from ₹790 to ₹747 today.  

The Adani Group lost ₹1.13 lakh crore in market capitalisation today. As per Tuesday’s closing, the Adani Group’s market cap was ₹15.85 lakh crore which fell to ₹14.71 lakh crore on Wednesday.

While the drop in Adani stock prices may be attributed to political reasons, it is an enigma as to why the stocks of PSU’s like Power Grid, Coal India, and NTPC nose-dived today.

As per the Supreme Court order the purchase details of the electoral bonds, that is, the purchaser, the beneficiary political party, and the amount of the donation that was given to any political party by the purchaser of the bond will be uploaded on the web-site of the Election Commission on March 15, for the public to see. The tremors in the stock market makes one wonder if the revelation may be akin to another big expose, albeit, at a larger and wider scale, affecting many companies.

Adani’s stock woes resurface

Adani Enterprises, the flagship company of the group, lost ₹24,658 crore (6.93%) in market cap, while Adani Port lost ₹19,819 crore (7.05%). Adani Green lost ₹27,261 crore (9.07%). Adani Power and Adani Transmission, too, lost ₹10,722 crore (5%) and ₹10,130 crore (9.54%), respectively.  

For the Adani Group, today’s fall was the biggest the conglomerate had witnessed since the Hindenburg report released in January last year. Between January 2022 and Mid March 2022, Adani Group lost almost 60% of its market cap following the Hindenburg expose. 

In the month of January 2022, Adani Enterprises, the flagship company of the Group announced raising ₹20,000 crore through the FPO route. It was labeled as the largest ever FPO in Indian capital markets history. However, Adani Group had not fully recovered from the Hindenburg set-back and and its market cap never touched the highs it had achieved before Hindenburg. 

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