‘Shouldn’t Adani Enterprises, APSEZ be excluded from Nifty 50?’: Twitter users on Adani stocks’ volatility

Ever since Adani Group companies’ stocks started gyrating due to a short seller’s scathing report on the conglomerate, Twitter users have started wondering if Adani Ports and Adani Enterprises should even be part of the coveted Nifty 50 index. Nifty 50 refers to the average of 50 of the largest Indian companies listed on the National Stock Exchange. These large-cap stocks are almost never prone to volatility and are supposed to display strength even when broader indices underperform during any adverse market-moving news. 

Nifty 50 index is reviewed by NSE every six months to remove the laggards and include a more promising stock in the coveted index. “NIFTY 50 uses clear, researched and publicly documented rules for index revision. These rules are applied regularly, to obtain changes to the index set. Index reviews are carried out every six months to ensure that each security in the index fulfils all the laid down criteria,” states NSE website.

Adani Enterprises, the flagship firm of the embattled Adani Group, was included in Nifty 50 in September 2022 and it replaced Shree Cement. In 2015, Adani Ports was made part of Nifty 50 at the expense of NMDC. 

Gautam Adani-led Adani Group’s seven listed stocks have together lost about $120 billion in market value since a January 24 report by US short-seller Hindenburg Research accused it of improper use of offshore tax havens and stock manipulation, allegations the ports-to-power conglomerate has denied. 

On Monday, all stocks of the Adani group were under pressure. Adani Enterprises fell 7%, while Adani Total Gas, Adani Power, Adani Ports and Adani Transmission lost 5% each.

Adani Total, a joint venture with France’s TotalEnergies, has lost 70% since the Hindenburg report, while Adani Enterprises is down 50%.

Looking at the volatility, some Twitter users have quipped that Adani stocks are performing like penny stocks. 

“Basically Adani stocks are now held by a large promoter and persons acting in concert who are holding these listed entities, but no liquidity or trading volumes. why does the Index Management Committee not remove the two Adani stocks from the Nifty. They fill none of the criteria of inclusion now,” said a Twitter user. 

“Adani Enterprises and Adani Ports; after what they are going through for the last one week, are they still eligible to be part of Nifty 50?” asked finfluencer D Muthukrishnan. 

“Adani Enterprises was not eligible for inclusion in (Nifty 50) in the first place after it moved from Rs 145 to Rs 4,000 in 2 years. How can a large cap stock move like this?” wondered another Twitter user. 

“At a time when no active MFs ever brought Adani group of stocks, it is a shame that NSE decided to include it as part of NIFTY 50 and they are keeping quite even with the current scenario,” said another Twitter user. 

“When Nifty was above 12k in Jan 2020, Adani Ent was 250. In 3 years Nifty had risen 50% to 18k. Meanwhile Adani Enterprises hit over Rs 4,000. Please check the growth in profits in this period. Those who sounded an alarm were all called traitors. Regulators need to do their job,” explained a Twitter user.

“NSE Puts Adani Enterprises, Adani Port, Ambuja Cement under ASM framework #Adani. Wow, I don’t think it would ever have happened in a #Nifty stock anytime in the past,” quipped finfluencer Sandeep Sabharwal referring to additional surveillance measures imposed on a few Adani stocks. On Friday, Adani Ports and Ambuja Cements were removed from ASM framework while Adani Enterprises continues to be under ASM. 

With S&P announcing earlier this month that it would remove Adani companies from its Dow Jones Sustainability Indexes, Twitter users said NSE should take similar action against the Adani stocks that are part of Nifty 50. 

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