Shares of three Adani Group companies saw a spike on Wednesday. This after BSE and NSE raised the upper circuit limits of four of the Adani group stocks.
The circuit limits have been changed for Adani Green Energy, Adani Transmission, and Adani Wilmar to 10% from 5%. For Adani Power the circuit limit has been raised from 5% to 20%.
According to an NSE circular, the adjustments, which take effect on Wednesday, June 7, will ensure that the price of the stock cannot go either higher or downward above a limit specified for the day.
According to the exchange, 172 companies have their circuit restrictions adjusted.
The stock exchanges BSE and NSE decreased the circuit limit for Adani Transmission, Adani Green Energy, and Adani Total Gas in January. The choice was made after the Adani stocks took a substantial hit as a result of charges made against the firm by US-based Hindenburg Research.
How do circuit limits work?
Circuit limits are measures put in place by the exchange to stop significant price swings in equities over a relatively short period of time. Orders for that specific stock or contract will stay pending at that circuit price when the price of an instrument reaches the upper or lower circuit limit established by the exchange.