Adani Enterprises stock exits NSE’s additional security framework after a month

After a month, NSE removed Adani Enterprises from the short-term additional security measure framework.

adani group
Ambuja Cements and Adani Ports and SEZ were also put under the short-term additional surveillance measure framework on 2 February.

Gautam Adani-led Adani Enterprises stock has been removed from the NSE’s short-term additional surveillance measure (ASM) after over a month, according to a circular released by the exchange. The flagship conglomerate was put under the framework on 2 February, following the heightened volatility in the share prices after the dissemination of the Hindenburg report. Along with the flagship conglomerate, Aaron Industries was also removed from the framework, which goes into effect on 8 March.

Other Adani group companies, Ambuja Cements and Adani Ports and SEZ, were also put under the short-term additional surveillance measure framework (ST-ASM) on 2 February. However, these companies exited the ST-ASM framework shortly after, on 13 February.

What is ASM?

SEBI and the exchanges jointly introduced the ASM framework to “alert and advise investors to be extra cautious when dealing in these securities” according to an NSE circular. The securities are shortlisted to be placed under ASM covering the following parameters:

  • High Low Variation
  • Client Concentration
  • Close to Close Price Variation
  • Market Capitalization
  • Volume Variation
  • Delivery Percentage
  • No. of Unique PANs
  • PE

Certain trading restrictions are imposed on stocks that fall under the framework. “Applicable rate of margin shall be 50% or existing margin, whichever is higher, subject to maximum rate of margin capped at 100% with effect from February 6, 2023 on all open positions as on February 3, 2023 and new positions created from February 6, 2023,” said NSE on the actions under the short-term ASM framework. This seeks to deter traders from taking excessive risks and reduce volatility, since the liquidity will reduce.

Over the few past sessions, the Adani group shares have seen a sharp recovery. From 28 February to 6 March, Adani Enterprises has gained over 45%, rising 5% in trade on Monday amid positive momentum in the broader markets. Other of the group shares hit their upper circuit as well. Shares of Adani Power, Adani Transmission, Adani Energy, Adani Total Gas and Adani Wilmar jumped 5% each and their closing levels touched the respective upper price bands. The jump in Adani group stocks is a result of global equity fund GQG’s Rs 15,466 crore investment in four group entities via block deals last week, saying the group has “fantastic assets”.

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First published on: 07-03-2023 at 07:42 IST
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