Adani Enterprises extends losses, down 7% on demerger, BSE exclusion

NEW DELHI: Shares of Adani Enterprises extended losses on Friday, falling nearly 7 per cent in trade, in addition to a similar fall on Thursday ahead of the demerger involving the company, Adani Power and Adani Port & Special Economic Zone.

The stock closed 3.52 per cent down at Rs 706.20.

The company has fixed June 4 as the record date for the scheme of arrangement. The stock would be excluded from S&P BSE 100 index and would be replaced by Eicher Motors.

PI Industries would be replacing the stock from the S&P BSE 200 index. Besides, Adani Enterprises would be dropped from S&P BSE 500 index in favour of Vinati Organics.

Speculation that global index provider MSCI might exclude the company from the benchmark also added to the negative sentiment, ET reported.

Adani Enterprises is demerging its ports, power and transmission businesses in Adani Ports and Special Economic Zone, Adani Power and Adani Transmission, respectively, with effect from June 3, 2015, which necessitates its exclusion from the indices, BSE said in a notice.

Adani Ports and Special Economic Zone was down 1.1 per cent, while Adani Power was up 0.5 per cent.

Similarly, Adani Enterprises would be excluded from S&P BSE AllCap index, S&P BSE Carbonex index, S&P BSE industrials, S&P BSE LargeCap and S&P BSE LargeMidCap, the BSE notice added.

In a major recast of operations, diversified Adani group had in January this year consolidated its ports, power and mining assets into three separately-listed firms and would list a new company for transmission business.

On Thursday, the stock had dropped as much as 7.4 per cent in trade to Rs 717.25. Around 64 lakh shares had changed hands on BSE and NSE combined, against the two-week average volume of 26 lakh shares.

The stock hit its life-time high of Rs 803.90 on Tuesday after rallying 66 per cent since the election results in May last year.

“There was buzz that Adani Enterprises may be excluded from the MSCI index - which is the regular practice of MSCI during corporate action. This may lead to selling by global funds,” Rikesh Parikh, VP-markets strategy and equities, Motilal Oswal Financial Services, told ET.

Once the restructuring is complete, Adani Enterprises would be left with mining operations, whereas the group's port and power businesses would be spun out of the flagship Adani Enterprises into its listed power and port subsidiaries, ET reported.