Adani Enterprises may see USD 189 million inflows post-Nifty entry

NEW DELHI: Adani Enterprises (AEL), the flagship Adani Group company, could see maximum inflow and Shree Cement the maximum outflow of funds after the Nifty indices rejig takes effect on Friday, according to Edelweiss Alternative and Quantitative Research report.

The report said two Adani Group stocks will witness very high fund inflow following the rejig. AEL, which will be added to the Nifty50 after an upgrade from the Nifty Next 50, could see an inflow of $189 million while Adani Total Gas, which will be included in the Nifty Next 50, will likely see an inflow of $42 million.

The research firm has calculated that Adani Enterprises is likely to see additional buying of 4.3 million shares, 1.3 times the 20-day average volumes following the rejig. On the contrary, Shree Cement could see an outflow of $56 million. IT firm Mindtree, which is being excluded from Nifty Next 50, is expected to see outflow of $55 million, as per the report.

AEL is becoming the second company from the billionaire Gautam Adani-promoted Group to be included in the Nifty 50 index after Adani Ports and SEZ. The indices are reshuffled periodically and stocks are taken in or removed depending on the change in their average free-float market cap. When a stock is included in a known index, it gets money from passive funds that track indices.

A senior fund manager at a leading Asset Management Company said the valuation of Nifty is going to go up as market-caps of all Adani group Companies are very high vis-a-vis the profit they generate. “For active fund managers like us, it will be difficult to outperform some of the index funds that have Adani group companies (given their level of valuations) till the cycle reverses,” he said.

There is also curiosity in the market as to how AEL’s entry in the Nifty50 index would impact the index’s price-to-equity ratio (P/E) as AEL’s P/E stands at about 394 as against Nifty50’s 20.1.   Adani Enterprises will enter the Nifty with a weightage of 1.29%, while Shree Cement, which is being excluded, had a weightage of 0.38%. 

Adani firm gets E10K cr for Ganga Exp project
Adani Enterprises on Thursday said its three wholly-owned subsidiaries have achieved financial closure for the access-controlled six-lane greenfield Ganga Expressway Project in Uttar Pradesh under public-private partnership mode. The company said it has secured finances of `10,238 crore from lenders.