Adani bulls cut positions before news of US indictment

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Subscribe to enjoy similar stories. Mumbai: Two days before a US court indicted senior officials of Adani Green Energy for allegedly bribing Indian state government officials to secure lucrative power contracts, bulls on two of the group companies' derivatives counters slashed their long positions, saving them from massive losses that hit the group shares after the news broke. A report of the allegations, dismissed as "baseless" by the Adani Group, surfaced early on Thursday morning, leaving investors with a ₹2.24-trillion hole in their pockets at the end of the day.

Interestingly, certain traders holding futures positions of Adani Enterprises and Adani Ports, squared off or closed out a substantial part of these on Tuesday, two days ahead of the carnage. Wednesday was a holiday for assembly elections in Maharashtra. On Adani Enterprises' active futures contract, traders squared off 16.27 lakh shares on Tuesday, reducing outstanding positions—open interest (OI)—by 8% to 1.78 crore shares with the contract price closing down 0.25% to ₹2,819.55 a share, National Stock Exchange (NSE) data shows.

On Thursday, post the news, the contract, which takes cues from the spot price, tanked 23% to ₹2,178.55. The crash was driven by bulls further liquidating their outstanding positive positions by 22.92 lakh shares or 13% to 1.55 crore shares. A fall in share prices accompanied by a decrease in open interest (OI) indicates long liquidation.