Will Adani Enterprise replace Wipro from Sensex? Know what it means for Adani Group

In a significant milestone, Adani Enterprise (AEL) stock is expected to replace Wipro in the Sensex, after which it will be the first Adani Group share to enter the benchmark, according to IIFL Alternative Research note. However, the official announcement on the same is still awaited. 

As per experts, it is anticipated that an announcement of the same may come on Friday, May 24, aligning with the semi-annual rebalancing exercise for the BSE indices.

What does it mean for Adani Group?

The Sensex is a benchmark index of the Bombay Stock Exchange (BSE) comprising the top 30 companies in various sectors. Inclusion in the Sensex brings increased visibility, credibility, and investor attention to a company. If it happens, this would be the first inclusion of any company owned by the Gautam Adani-led conglomerate. It should be noted that the flagship was expected to be added to the Sensex in 2023 but lost the chance due to the Hindenburg Saga.

Experts believe that the inclusion of AEL to the Sensex will result in inflows worth $118 million. On the other hand, Wipro projects outflows worth $56 million, the following exclusion.

For Adani Enterprises, being included in the Sensex would likely result in heightened investor interest, potentially leading to increased trading volumes and liquidity for its shares. This could also attract more institutional investors who track and invest based on index composition changes.

Moreover, it could be interpreted as a recognition of Adani Enterprises' growing influence and market capitalization within the Indian economy. The Adani Group has been expanding its presence across various sectors, including infrastructure, energy, logistics, and agribusiness, and inclusion in the Sensex would validate its position as a major player in the Indian business landscape.

However, it's essential to note that index changes are based on several factors, including market capitalization, liquidity, and sector representation. So, if Adani Enterprises were to replace Wipro, it would reflect not just its performance but also shifts in the broader market dynamics and investor preferences.