October 1, 2022
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Adani firm set for $280 million passive flows on Nifty inclusion

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NEW DELHI: Adani Enterprises Ltd., owned by the world’s third richest person Gautam Adani, is set to attract inflows of about $281 million as it joins one of India’s key equity gauges later this month, according to Brian Freitas, an analyst on the research platform Smartkarma.
The flagship company that handles businesses from ports to power joins the NSE Nifty 50 Index on September 30, the National Stock Exchange of India said earlier this month. That’s likely to further propel shares that have more than doubled this year, compared with a less than 2% gain in the Nifty 50.
“Passive funds that track the Nifty index will need to acquire more than 7% of free-float shares in Adani Enterprises,” Freitas said in a phone interview. “This could see the stock continuing to move higher.”
Adani Enterprises’ inclusion to the Nifty 50, India’s most watched equity measure along with the 30-member S&P BSE sensex Index, coincides with a report that cautioned group finances had become stretched. The conglomerate, with seven listed companies, said its been reducing debt and ratios “continue to be healthy and are in line with industry benchmarks.”
“From a methodology standpoint, Adani Enterprises satisfies all the inclusion criteria,” Freitas said. “An index is supposed to be a reflection of the market. If the market is pricing a stock at 400 times PE, who are we to say the market is wrong?”

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