Adani group stocks have been on a roller coaster ride so far this year, initially falling 30-80 per cent following the Hindenburg crisis and then going up by 11 to 86 per cent after the vote of confidence from GQG partners.

During this up and down phase over the last many weeks, while there have been substantially higher traded volumes in Adani Group stocks, the data on shares delivered indicates that buyers may have been more interested in speculation rather than investing.

Multi-fold surge in trading volumes

We looked at the trading and delivery volumes for all the Adani group companies. Deliverable quantity is the number of shares that were taken physical delivery of, on any given day; deliverable quantity as a percentage of the total shares traded was also considered. In general (while not always the case) higher delivery quantity as a percentage of total shares traded in daily trading implies market participants are getting more positive on the near to medium term and are accumulating the stock.

Of course, this point is more apt when the delivery volume percentage increases in sync with shares trending up. Higher delivery volume indicates that investors are not looking to just benefit from the intraday move in the stock but will hold for some more time.

That market players saw a huge opportunity to speculate is evident from the volume of Adani group shares traded in stock exchanges. Sample this. The daily average volume of total shares traded in both the BSE and NSE for Adani Enterprises during the period 2 January 2023 to 23 January 2023 was about 17.5 lakh shares. But the average daily volume of shares traded post January 24 (when the Hindenburg report surfaced) has increased ten-fold to about 1.77 crore shares. Likewise, Adani Ports and Special Economic Zones’ traded volume across BSE and NSE has witnessed an eight-fold increase in average daily trading to 3 crore shares since January 24. Other group companies have also seen significant increase in traded quantity (see table).

Lower delivery percentage

While the deliverable quantity, in absolute numbers, too has increased multi-fold post January 24, as a proportion of total traded quantity, deliverable quantity is still lower for stocks that are in the derivatives segment such as Adani Enterprises, Adani Ports and Special Economic Zone, ACC and Ambuja.

Adani versus Hindenburg: A perennial battle between the bulls and the bears  Adani versus Hindenburg: A perennial battle between the bulls and the bears  

For instance, for Adani Enterprises, the average daily deliverable quantity was at about 3.85 lakh shares from January 2 to January 23, while the same has increased multiple times to over 30 lakh shares. However, the average deliverable quantity as a percentage of the total traded quantity has actually declined from 20 per cent to 17 per cent. This trend suggests more speculation.

Also read: Adani vs Hindenburg: A brief story of short sellers

The only companies where deliverable quantity percentage has increased is in the case of non-F&O stocks where circuit breakers get activated. These stocks typically have a circuit breaker limit specified, which may be 5 per cent, 10 per cent or 20 per cent of the previous close price, and the moment the stocks hit the circuit levels on either sides (up or down) trading is halted in these stocks. This was applicable in cases of Adani Green, Adani Power, Adani Wilmar and Adani Total Gas (see table).

For these companies, the deliverable quantity as a proportion of the total traded volume has increased significantly, post the Hindenburg report. While these stocks have seen sharp correction and there possible could have been some buying in these stocks, because of the circuit breaker rules in place and the stocks trading at lower circuit for many days, buyers would have been forced to take delivery of the shares. This trend again suggests many could have entered as traders only but could have become investors due to lack of choice.