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Nifty 50 rejig: Adani Enterprises replaces Shree Cement; IRCTC, Adani Total Gas, HAL enter Nifty Next 50

Gautam Adani-led Adani Enterprises will become part of Nifty 50 from Friday, 30 September, in NSE’s upcoming semi-annual index rejig. Adani Enterprises will replace Shree Cement from the 50-stock index. This is the second Adani stock to be included in the Nifty 50 index after Adani Ports and Special Economic Zone. Apart from Nifty 50, changes have been announced in Nifty Next 50, and Nifty IT. Adani group has seven established listed entities, including Adani Green Energy, Adani Power, Adani Total Gas, Adani Transmission, Adani Ports and Special Economic Zone, Adani Wilmar, and Adani Enterprises.

According to earlier estimates by Edelweiss Alternative and Quantitative Research, Adani Enterprises’ inclusion into the Nifty 50 index would have led to inflows of $285 million into the stock. However, according to the research firm’s latest review report dated 28 September, this inclusion will lead to inflows of $336 million. So far this year, Adani Enterprises’ share price has more than doubled, zooming 107.4 percent to now trade at Rs 3,561 per share. Shree Cements’ stock price, meanwhile, is down 23 percent during the same period.

In the last 6 months, Adani Enterprises’ share price is up 86.5 percent, on the other hand, Shree Cements stock is down 10 percent and is trading at a price of Rs 20,963.5 per share. “We at Edelweiss Alternative & Quantitative Research have analyzed the flow impact led by rebalancing and recapping of stocks in key indices (Nifty 50, Nifty Bank, and CPSE Index) and inclusion/exclusion in Nifty Next 50 and Nifty IT,” the report said.

IRCTC, Adani Total Gas, and others enter the Nifty Next 50

Nifty Next 50 index will see the entry of marquee names such as Bharat Electronics, Shree Cements, Adani Total Gas, Hindustan Aeronautics (HAL), IRCTC, Mphasis, and Motherson Sumi Wiring India. Moving out of the junior Nifty index will be Adani Enterprises, Dominos operator Jubilant FoodWorks, MindTree, Lupin, Punjab National Bank (PNB), SAIL, and Zydus Lifesciences.

Persistent Systems replaces Mindtree in Nifty IT

For the Nifty IT index, Edelweiss noted that Persistent Systems’ stock will enter the index replacing Mindtree. Inflows towards Persistent Systems (PSYS) will be around $16 million, and outflows from Mindtree would be around $23 million. However, no changes to the Nifty Bank index and Nifty CPSE have been made.

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India defers govt bond index inclusion to next year; $30 bln opportunity pushed back due to operational issues

India has deferred the planned inclusion of the government bonds in the JP Morgan emerging market global index to next year, as was being speculated on the street. The bond inclusion in the global index may have been pushed back to early 2023, as the Government of India still needs to address various operational issues, Reuters reported citing unidentified sources. Earlier, Goldman Sachs and Morgan Stanley had predicted the bond index inclusion would happen only in the 2nd or 3rd quarter of the next year. The Indian government began considering listing its securities for inclusion in global bond indices in 2013. However, restrictions on foreign investments in Indian debt meant that the country had to roll out a number of steps before its securities could be eligible.

Goldman Sachs said India bonds could be included in the index with a 10 percent weightage, the maximum for a country in the index, resulting in potential inflows of $30 billion from the move. Meanwhile, Barclays also said India could possibly be added to the Bloomberg Global Aggregate bond index.

If successful, India would be the last major emerging market to be added to the JP Morgan index, according to Reuters. Earlier this month, Morgan Stanley estimated that India’s inclusion could result in additional flows of as much as $30 billion within 10 months into the Indian government bond market. Last year, Morgan Stanley predicted that it could generate $170 billion to $250 billion of inflows over the next decade. “Most of JPMorgan’s index investors are in favor of including India in the index, but think issues such as investor verification and settlement rules need to be ironed out first,” Reuters reported citing three unidentified sources.

Bonds listed on global indices are settled through international platforms, including Euroclear, outside a country’s borders. It may be noted that Russia’s exclusion from the JPMorgan gauges came after it invaded Ukraine. In the Government Bond Index – Emerging Markets Global Diversified, or GBI-EM index, Russia had a weight of about 8 percent before it was removed, and now there are seven countries with a weight of 10 percent each and 13 countries sharing the remaining 30 percent, according to the Morgan Stanley note.

Earlier this month, Bloomberg noted that India was ‘on track to be placed on index watch for inclusion in JPMorgan’s bond index.

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WAPCOS files IPO papers with Sebi; government to divest stake

Public sector firm WAPCOS Ltd has filed preliminary papers with capital markets regulator Sebi to float an Initial Public Offering. The public issue will be a complete Offer For Sale (OFS) of up to 32,500,000 equity shares by the promoter, the Government of India, according to the Draft Red Herring Prospectus (DRHP).

WAPCOS provides consultancy, and engineering, procurement, and construction services in the field of water, power, and infrastructure sectors. It comes under the Ministry of Jal Shakti. The company also provides its services abroad, particularly in South Asia and across Africa in the fields of dam and reservoir engineering, irrigation, and flood control.

It has ongoing projects in 30 countries and has been associated with over 455 overseas projects, both completed and ongoing, as per DRHP. The company’s revenue from operations increased 11.35 percent to Rs 2,798 crore in the financial year 2022 while profit after tax rose 14.47 percent to Rs 69.16 crore during the same period.

Some of the listed peers in the segment are Ircon International, Rites, Engineers India, NBCC, and Va Tech Wabag. As on March 2022, the company’s order book stood at Rs 2,533.93 crore and Rs 18,497.33 crore for construction contracts. So far in the current fiscal, the Centre has collected Rs 20,557 crore by way of divestment proceeds through the Life Insurance Corporation of India IPO and Rs 3,000 crore from minority stake sale in ONGC.

The government has pegged the divestment targets at Rs 65,000 crore for the current financial year. IDBI Capital Markets & Securities Ltd and SMC Capitals Ltd are the book-running lead managers for the issue. The equity shares are proposed to be listed on BSE and NSE

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