3 Adani stocks put under short-term surveillance by NSE; Here's what it means

As many as three Adani Group stocks - Adani Enterprises, Adani Power Ltd and Adani Wilmar- have been put under the short-term additional surveillance mechanism (ASM) framework, said a circular by National Stock Exchange (NSE). The order will come into effect from Thursday, the circular said.

Adani Enterprises Ltd was moved out of surveillance by NSE just a day earlier. The flagship company of Gautam Adani-led conglomerate remained under observation for almost a month.

In the short term ASM, there are two stages. Stocks are retained in each stage as applicable for a minimum period of 5/15 trading sessions and are eligible for review from 6th/16th trading day onwards. A total of 29 companies are under short term ASM framework, whereas 88 companies are under long term ASM.
NSE said Adani Green Energy and New Delhi Television (NDTV) will move to stage-II of long-term additional surveillance from stage-I with effect from Thursday.

In order to safeguard investors from speculative or malicious trade and to protect their interests, exchanges move stocks to short-term or long-term ASM framework during the highly volatile instances.

Shares of ten listed Adani group companies have been moving upward for the last six trading sessions amid some positive developments and low level buying from investors. The total market capitalisation of the Adani Group companies topped Rs 9 lakh crore on Wednesday from a sub-Rs 7 lakh crore level earlier this month.

Securities under ASM are monitored and moved to trade-to-trade (T2T segment) and a 100 per cent of traded value gets blocked as margins, which means that no intraday leverage is given. However, MIS is still allowed for F&O stocks under Stage I of short term ASM.

Pledging of stocks under the ASM category is not allowed. 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.

Adani Group, on Tuesday, announced prepayment of share-backed financing of Rs 7,374 crore ahead of its maturity in April 2025. Prior to this, GQG Partners infused a significant amount of more than Rs 15,000 crore in 4 group companies last week, and is likely to increase this, according to some media reports.

Following this capital infusion, the promoter leverage has come down in Adani Ports, Adani Enterprises, Adani Green Energy Ltd and Adani Transmission. This further bolstered sentiment and pushed the stocks higher.

NSE had earlier placed Adani Ports and Ambuja Cements Ltd under ASM framework, along with Adani Enterprises, on February 3, but the former two were moved out of it on February 10, whereas the latter one eliminated from the framework on March 7.

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