Adani Ports to enter Sensex from June 24; Wipro to move out.
Explore how Adani Ports and Special Economic Zone (APSEZ) secured a milestone inclusion in the BSE Sensex amidst market upheaval triggered by the Hindenburg Research Report.
Sixteen months following the Hindenburg Research Report's release, which precipitated a significant decline in the stock prices of all Adani Group companies, a notable member of the conglomerate—Adani Ports and Special Economic Zone (APSEZ)—has secured a coveted position among the 30 companies comprising the BSE Sensex.
This marks the first instance of an Adani Group entity being included in the Sensex. Notably, Adani Enterprises and Adani Ports have been constituents of the NSE’s Nifty 50 for several months now.
In line with the reconstitution of S&P BSE indices, announced by Asia Index Pvt Ltd (AIPL) on Friday, APSEZ will replace Wipro in the 30-share Sensex, effective from June 24. This decision to integrate Adani Ports into the Sensex comes shortly after Norges Bank, the central bank of Norway, excluded Adani Ports from its Government Pension Fund Global due to the perceived "unacceptable risk" it posed concerning human rights violations during times of war and conflict.
In January 2023, Hindenburg Research, based in the US, accused the Gautam Adani-led ports-to-energy conglomerate of engaging in stock manipulation and accounting fraud, allegations that the company vehemently denies. This report led to a substantial decline in the market capitalization of the group's listed companies, with their share prices plummeting by 20-80% within a month of the report's release. However, the stock prices of all Adani Group companies have since rebounded, reclaiming the losses incurred due to the Hindenburg report. For example, shares of Adani Ports traded nearly 84% above their January 23, 2023, level on Friday, the day before the Hindenburg report was published.
BSE has established specific criteria for companies seeking inclusion in the S&P BSE SENSEX, requiring them to rank among the top 75 companies based on their average three-month float or total market capitalization. Furthermore, Sensex constituents must maintain a minimum free-float market capitalization of 0.50% after meeting market cap and liquidity criteria. The Sensex undergoes biannual reconstitution in June and December each year. In accordance with the reshuffle announced by Asia Index Pvt Ltd, REC Ltd, HDFC Asset Management Ltd, Canara Bank, Cummins India, and Punjab National Bank will replace Page Industries Ltd, SBI Cards and Payment Services Ltd, ICICI Prudential Life Insurance, Jubilant FoodWorks Ltd, and Zee Entertainment Enterprises Ltd in the S&P BSE 100.
Divi’s Laboratories Ltd will be removed from the S&P BSE Sensex 50, with Trent Ltd being added to the index. Additionally, AU Small Finance Bank and IDFC First Bank will be replaced by Yes Bank and Canara Bank in the S&P BSE BANKEX. Asia Index operates as a 50-50 partnership between S&P Dow Jones Indices LLC and BSE Ltd.
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