‘Surveillance actions on stocks driven by non-discretionary rules’

“NSE’s surveillance actions on eligible stocks are applicable as per transparent rules. These rules are non-discretionary, pre-announced and automatically applicable,” NSE said in a statement. Some of the Adani Group stocks were kept under surveillance after their share prices came under heavy selling following a January 24, 2023 report by US-based short seller Hindenburg Research which had alleged the conglomerate of stock manipulation and accounting fraud.The Group has denied all the allegations made by the report.

Three Adani Group companies – Adani Enterprises, Adani Wilmar Ltd and Adani Power were removed from the short-term ASM framework with effect from March 17. Earlier, Adani Ports and Special Economic Zone Ltd (APSEZ) and Ambuja Cements came out of the ASM framework with effect from February 13.

NSE said the inclusion or exclusion of stocks under Additional Surveillance Measures and other trading activity based on specific rules like price bands, trade for trade (T2T), etc, are based on parameters which consider price volatility, volumes, market capitalisation, client concentration, and liquidity parameters.

“Once the index criteria have been crystallised, NSE Indices or it’s committees exercise no human discretion in deciding on inclusion or exclusion of stocks in any of its indices,” it said. Based on the well-defined index criteria available on NSE and NSE Indices website, market participants are able to predict the changes in index constituents in various indices in the upcoming index review.

NSE said the entire framework has been time tested and any changes to the said rules are also pre announced before any future action on the basis of new rules becomes applicable.