Adani Enterprises, Adani Ports, and Ambuja Cement under ASM

The National Stock Exchange (NSE) of India has placed Adani Enterprises, Adani Port, and Ambuja Cement under the ASM (Additional Surveillance Margin) framework. The NSE announced on February 2, 2023, that starting on February 6, 2023, a margin of 50% or the current margin, whichever is higher, but not exceeding 100%, will be required on all open positions as of February 3 and new positions established from February 6.

What is ASM?

The ASM (Additional Surveillance Measure) was introduced in 2018 by SEBI and recognized stock exchanges to monitor highly volatile stocks in the Indian stock market. It acts as a control mechanism to prevent speculative trading and protect retail investors from unfavorable trading situations. Stocks that are under surveillance due to price and volume fluctuations are considered ASM List stocks. The purpose of placing these stocks on the list is to make investors cautious and alert them when dealing with such stocks. However, it is important to note that the ASM framework is solely for market surveillance purposes and should not be interpreted as an action against the company.

What does it mean for investors/traders?

Stocks included on the ASM list are subject to stricter rules and cannot be pledged, traded intraday, or used for margin trading. Five days after being added to the list, a 100% margin restriction is imposed, making margin trading impossible. These stocks are also subject to a 5% circuit filter, meaning the stock price cannot fluctuate more than 5%. This is implemented to limit the potential profits or losses for traders.

Does it affect company’s business and corporate actions?

No this not affect a company’s operations and business. Any corporate action that benefit investors remain unchanged despite being listed on the ASM. Standard procedures such as paying dividends, bonuses, and implementing stock splits are still being followed.

For further notes on ASM, you can refer here.

Shrimohan Jhawar
Product Operations @ Dhan

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Thanks for the info, if already in position .
But hedged requirement as of now is 12L what would the new margin requirment be ?

Hi @pavz Margin calculation is quite cumbersome in terms of math. If you can help me out with actual positions / strategy, ill be able to compute the approx. margin requirement.

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As per the recent update, Adani Enterprises has been removed from Dow Jones Sustainability Indices effective February 7.

Dow Jones on February 3, Friday announced “Adani Enterprises will be removed from the Dow Jones Sustainability Indices following a media and stakeholder analysis triggered by allegations of accounting fraud.”

What are Dow Jones Sustainability Indices?

The Dow Jones Sustainability Indices are float-adjusted market capitalization weighted indices which are curated to measure the performance of companies selected with ESG (Environmental, Social, Governance & Economic) criteria as identified by S&P Global through the Corporate Sustainability Assessment (CSA). It represents the top 10% of the largest 2,500 companies in the S&P Global BMI based on long-term ESG criteria.

How it can impact the stock price?

This move will make the stock less appealing for environment conscious investors.

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