Adani Group: The NSE has issued a circular, which states that as many as three Adani Group stocks – Adani Enterprises , Adani Power and Adani Wilmar have been put under the short term additional surveillance mechanism (ASM) framework.
Three Adani Group Companies put under NSE Short Term Surveillance Mechanism (ASM)
It has been reported that Adani Enterprises Ltd was moved out of surveillance by NSE just a day earlier. Gautam Adani led conglomerate has remained under observation for almost a month.
In the NSE Additional Surveillance Mechanism (ASM), there are two stages in which stocks are retained in each applicable for a minimum period of 5/15 trading seasons and are eligible for review from 6th/16th trading day onwards. There are 29 companies under short term ASM framework, whereupon 88 companies are under long term ASM. NSE has stated that Adani Green Energy and New Delhi Television (NDTV) will move to stage-II of long term surveillance from stage-I.
Stock exchanges move from short-term to long term ASM framework during volatile instances to safeguard investors from speculative or malicious trade to protect their interests.
Amid positive developments and low level buying from investors, shares of ten listed Adani group companies have been moving upward for the last six trading seasons. Infact, the total capitalization of Adani Group Companies has consolidated 9 lakh crore from sub-Rs 7 lakh crore level earlier this month.
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ASM Monitored under trade to trade (T2T segment)
Securities under the aegis of ASM are always monitored and moved to trade to trade (T2T segment) and a 100 percent of traded value gets blocked as margins, which means that no intraday leverage is considered. However, MIS is allowed for F&O stocks under stage I of short term ASM.
Pledging of stocks under ASM category is not allowed and if a stock that is pledged is moved under ASM, collateral margins are no longer be provided, and the collateral value are reduced by the value of collateral received against the stock.
In recent move, the Adani Group has announced prepayment of share backed financing of Rs 7,374 crore ahead of its maturity in April 2025. In another development which has boosted Adani Group of companies, GQG Partners have infused a significant amount of more than Rs 15,000 crore in 4 group companies last week, and is likely to increase this.
With capital infusion from Adani Group, the promoter leverage has come down in Adani Ports, Adani Enterprises, Adani Green Enterprises and Adani Transmission. This move has bolstered sentiment and pushed the stocks higher.
NSE has placed Adani Ports and Adani Cements Ltd under ASM framework , along with Adani Enterprises, on February 3. However on February 3 Adani Ports and Ambuja Cements Ltd moved out of ASM Network on February 10. Whereas as Adani Enterprises moved out of Network on March 7.
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