The flagship entity of the Adani Group – Adani Enterprises replaced Shree Cement in Nifty 50, the National Stock Exchange’s (NSE) benchmark index. These changes are based on factors including the free float market capitalization of the companies.
This inclusion could lead to a net inflow of around $213 million on Adani Enterprises’ counter, however, Shree Cement might see an outflow of $87 million, according to Edelweiss Securities Ltd., reported Bloomberg.
Shree cement is a leading cement-making firm that owns brands such as Roofon, Bangur Power, Bangur Cement, Shree Jung Rodhak, and Rockstrong. Meanwhile, Adani Enterprises is the second company of the ports-to-power conglomerate, after Adani Ports and Special Economic Zone to be included in the benchmark index.
The Index Maintenance Sub-Committee — Equity (IMSC) of NSE Indices announced on Thursday that Adani Enterprises would replace Shree Cement starting September 30, 2022. This is a boost for the billionaire. His firm’s weightages have been adjusted on the MSCI India Index in recent months.
The Fitch Group’s debt research unit CreditSights said last month that the group’s companies are “deeply overleveraged” and its many investments in capital-intensive businesses could pose long-term risks to investors. However, the group company has been included in the index.
The group is surging ahead with a string of acquisitions. It has announced plans to push into multiple new businesses, including media, healthcare and digital services. In fact, it is trying to buy a controlling stake in NDTV, an Indian news network.
Adani Enterprises’ shares climbed 1.45% after the inclusion and are trading at ₹ 3,280.00. The company’s share price surged 22.15% in the past month and has given multibagger returns of 108.72% in the past year!
Several changes have been announced in indices, including Nifty Next 50, Nifty 500, Nifty 200, and Nifty 100, apart from Nifty 50. However, no changes are being made to the Nifty Aditya Birla Group, Nifty Mahindra Group, and Nifty Tata Group indices.
Adani Green Energy Ltd. and Adani Transmission Ltd. have significantly higher average free-float market capitalization than Adani Enterprises, however, they will not be included in the Nifty Index. Abhilash Pagaria from Edelweiss Securities Ltd wrote in a note, earlier this month that their stock derivatives are not yet allowed by India’s exchanges.
Adani Total Gas Ltd, Bharat Electronics Ltd, Hindustan Aeronautics Ltd, IRCTC Ltd, Mphasis Ltd, Samvardhana Motherson International Ltd and Shree Cements Ltd will be included in the Nifty Next 50 index. Further, Adani Enterprises Ltd, Jubilant Foodworks Ltd, Lupin Ltd, MindTree Ltd, Punjab National Bank, Steel Authority of India Ltd, and Zydus Lifesciences Ltd. will be dropped from the Nifty Next 50.
Written by Simran Bafna
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