According to the S&P BSE indices reconstitution by Asia Index Pvt Ltd (AIPL) on Friday, APSEZ will take the place of Wipro in the 30-share Sensex starting June 24.
After sixteen months since the Hindenburg Research Report caused a significant drop in Adani Group stocks, Adani Ports and Special Economic Zone (APSEZ) has secured a spot in the BSE Sensex, becoming the first Adani Group company to do so. However, Adani Enterprises and Adani Ports have been part of the NSE’s Nifty 50 for several months.
Adani Ports Inclusion in Sensex Signals Rebound Amidst Controversy
According to the reconstitution of S&P BSE indices by Asia Index Pvt Ltd (AIPL) on Friday, APSEZ will take the place of Wipro in the 30-share Sensex starting June 24.
Days after Norges Bank, the central bank of Norway, removed Adani Ports from its Government Pension Fund Global due to the ‘unacceptable risk’ it poses regarding human rights violations during war and conflicts, the announcement was made to include Adani Ports in the Sensex.
In January 2023, Hindenburg Research, based in the US, alleged stock manipulation and accounting fraud by the Gautam Adani-led ports-to-energy conglomerate. The company denied the accusations. The report led to a significant decline in the market capitalization of the group’s listed companies, with share prices plummeting by 20-80% within a month of the report’s release.
Nevertheless, the stock prices of Adani Group companies have fully recovered from the impact of the Hindenburg report. For example, Adani Ports shares traded approximately 84% higher than their level on January 23, 2023, the day before the report was released.
BSE has established criteria for adding companies to the S&P BSE SENSEX. They are selected from the top 75 companies based on their three-month average float or total market cap. Sensex members must meet a minimum free-float market cap of 0.50% after fulfilling market cap and liquidity requirements. The Sensex undergoes biannual reconstitution in June and December annually.
According to the reshuffle unveiled by Asia Index Pvt Ltd, REC Ltd, HDFC Asset Management Ltd, Canara Bank, Cummins India, and Punjab National Bank will take the spots of Page Industries Ltd, SBI Cards and Payment Services Ltd, ICICI Prudential Life Insurance, Jubilant FoodWorks Ltd, and Zee Entertainment Enterprises Ltd in S&P BSE 100.
Divi’s Laboratories Ltd will exit S&P BSE Sensex 50, replaced by Trent Ltd. Meanwhile, AU Small Finance Bank and IDFC First Bank will give way to Yes Bank and Canara Bank in S&P BSE BANKEX. Asia Index is jointly owned by S&P Dow Jones Indices LLC and BSE Ltd in a 50-50 partnership.
Adani Ports and Special Economic Zone Ltd (APSEZ) will replace Wipro Ltd in the 30-stock blue-chip S&P BSE Sensex from June 24, according to an announcement by the index operator on May 24. This move marks APSEZ as the first Adani Group company to join the Sensex. The changes were disclosed by Asia Index, a joint venture between S&P Dow Jones Indices and BSE, with implementation set for June 24, 2024. BSE also revealed alterations to its BSE 100, Sensex 50, Sensex Next 50, and BSE Bankex indices.
Page Industries, SBI Cards, ICICI Prudential Life Insurance, Jubilant FoodWorks, and Zee Entertainment Enterprises will exit the S&P BSE 100 index, being replaced by REC Ltd, HDFC AMC, Canara Bank, Cummins India, and Punjab National Bank.
Trent Ltd will join Sensex 50, while Divi’s Laboratories Ltd will be removed.
AU Small Finance Bank and IDFC First Bank will leave BSE Bankex on June 24, replaced by Yes Bank and Canara Bank.
Adani Ports may witness inflows of $252 million upon inclusion in the Sensex, with Wipro facing outflows of $161 million, according to Abhilash Pagaria, head of Nuvama Alternative and Quantitative Research.
Adani Ports’ addition to the Sensex coincides with a recovery in Adani Enterprises’ shares to January 2023 levels, following a report by Hindenburg Research that led to a sell-off in Gautam Adani’s conglomerate.
Since the report, Adani Ports and Adani Power have been the top-performing Adani stocks, rising by 86.04 percent and 157.4 percent, respectively, and were the first to rebound.
In May, Adani Ports reported a 76 percent increase in fourth-quarter profit, supported by record cargo volumes.
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