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The Securities and Exchange Board of India (Sebi) is examining Adani Power Ltd’s proposal to delist its shares from the exchanges, potentially intensifying woes for the Adani Group that is currently facing a wider probe by the markets regulator.

Two people aware of the development said Sebi’s scrutiny followed the Gautam Adani-held company announcing a buyback of shares at a price that is almost 65% less than the prevailing market price.

Shares of Adani Power tumbled from 155.8 on 10 June to 88.75 apiece on Thursday on BSE amid investor concerns following the Sebi investigation.

Last June, the board of Adani Power approved the voluntary delisting proposal by buying back shares at 33.82 apiece. The date of the proposed buyback has already been extended several times by the board.

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“Sebi may have certain reservations about the delisting proposal, primarily because the stock has been making unusual movements. It raises certain doubts when the company values itself so much lower than the price resulting from trading by public shareholders," one of the two people cited above said, seeking anonymity. “The delisting price was announced last year as per the Sebi formula, but now that price may not be very relevant, and why should any shareholder sell her shares at one-third the value? There are several issues Sebi is analysing before clearing the delisting proposal," the person added.

A spokesperson for Adani Power said the company has not received any communication from Sebi regarding the proposed delisting of Adani Power yet. “There is no such communication from authorities nor any such indication from concerned officials," a spokesperson for the Adani Group said separately.

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An email sent to Sebi remained unanswered.

Shares of Adani Power have surged about five times since the delisting announcement was made last year though it has pared some of the gains since.

With the sharp rise in the stock, post the delisting announcement, the number of public shareholders jumped almost threefold. According to BSE, the number of public shareholders in Adani Power rose from 334,000 in June 2020 to 981,000 in June this year.

Meanwhile, several investors continue to hold on in the hopes that the allegations against the Adani Group will be proven wrong by the conglomerate, or the group will produce satisfactory justifications and come out clear of Sebi’s probe.

With the regulator probing several Adani Group companies for alleged violations of securities laws, as disclosed by junior finance minister Pankaj Chaudhary in Parliament recently, and questions on the credibility of certain foreign portfolio investors in group companies, the markets regulator will be more comfortable in approving Adani Power’s voluntary delisting proposal after the probe is over, the people cited above said.

Adani Power’s net profit in the June quarter was at 278 crore against a loss of 682 crore a year ago.

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