Adani Ports to be included in Sensex from June 24, Wipro to be excluded

Adani Ports and Special Economic Zone (SEZ) will replace Wipro in the benchmark 30-share Sensex, index tracker Asia Index said in a notification on Friday.

This is the first time a Gautam Adani-owned company will be added to the widely tracked Sensex index. The change will become effective from June 24.

The move comes as a surprise as most analysts had expected Adani group flagship Adani Enterprises (AEL) to be added to the index given its higher market capitalisation. Adani Ports & SEZ has a market cap of Rs 3.06 trillion, while AEL is valued at Rs 3.86 trillion. However, exchanges consider free float market cap for computation of index changes. Adani Ports has promoter shareholding of 65.9 per cent, while AEL has 72.6 per cent.

Analysts said Adani Ports could be assigned a weightage of 1.2 per cent in the Sensex. The inclusion will result in inflows of $252 million (nearly Rs 2,100 crore) in Adani Ports, while Wipro could see selling to the tune of $161 million (close to Rs 1,400 crore), according to a note by Nuvama Alternative & Quantitative Research. The Sensex is tracked by passive funds with assets of around Rs 1.8 trillion. Shares of Adani Ports & SEZ last closed at Rs 1,416, down 1.9 per cent, while those of Wipro ended at Rs 463.5, with a decline of 0.5 per cent. Adani Ports currently trades at a 12-month forward price-to-earnings (P/E) ratio of 28.4 times and price-to-book (P/B) ratio of 4.9 times. By comparison, the Sensex trades at P/E and P/B of 20.3 times and 3.2 times, respectively.

Besides the Sensex, Asia Index announced changes to four other indices as part of its semi-annual rebalancing exercise. It added Yes Bank and Canara Bank to the S&P BSE Bankex, replacing AU Small Finance Bank and IDFC First Bank. Trent will replace Divi's Laboratories in the S&P BSE Sensex 50 index.

Meanwhile, REC, HDFC AMC, Canara Bank, Cummins India, and Punjab National Bank will replace Page Industries, SBI Cards, ICICI Prudential Life, Jubilant FoodWorks, and Zee Entertainment in the S&P BSE 100 index.