Continuing questions in his 15th series, Congress leader Jairam Ramesh on Monday questioned how Adani Enterprises was added to the National Stock Exchange Nifty 50 index in September 2022 despite questionable fundamentals, an excessive price-to-earning ratio and a tiny free float. The decision had exposed Indian retail investors to serious company risk by compelling Nifty index funds — which include the Employees Provident Fund Organisation — to increase their purchases of Adani stocks to Rs15,000 crore.
1. The world’s biggest stock index provider MSCI announced it would reduce the weightage of Adani stocks in coming months. Second largest S&P Dow Jones stated it would remove Adani Enterprises from its 50 indices. FTSE Russell said it would make changes to the weightage of Adani companies effective March 20, 2023.
The NSE has announced no review of Adani Enterprises’ position despite the fall in its share price. Should the Securities and Exchange Board of India not be trying to protect retail investors and review suspect companies?
2. The NSE announced on February 17, 2023, four Adani companies would be included in indices:
(a) Adani Wilmar: Nifty Next 50, Nifty 100
(b) Adani Power: Nifty 200, Nifty 500, Nifty LargeMidcap 250, Nifty Midcap 150, Nifty MidSmallcap 400, Nifty Total Market, Nifty Commodities, Nifty Housing
(c) Adani Total Gas: Nifty Shariah 25
(d) Adani Enterprises Nifty100 Liquid 15
Why is NSE exposing more investors to risky Adani stocks? Are you pressuring the NSE to help your friends via the NSE Index Advisory Committee member who also serves on your Economic Advisory Council?
3. Reports that Adani Green Energy is providing collateral for loans to Adani’s Australian coal project have prompted Norway’s largest pension fund to divest its holdings since its credentials are under question. ESG is a global investment theme. Sectors such as EVs, batteries and green fuels are reliant on ESG fund flows. What is holding SEBI back from investigating how Adani’s actions could damage the ESG investment theme in India?
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