NSE puts Adani Ent, Adani Ports and SEZ, Ambuja Cement under ASM framework

When a stock is included in the ASM list, it serves as a warning to the investors about unusual activity in the stock

The National Stock Exchange (NSE) on Thursday placed Adani Enterprises Limited, and Adani Ports and Special Economic Zone Limited under Short-Term Additional Surveillance Measure (ASM). The notification issued by the NSE said, "Market participants may note that ASM framework shall be in conjunction with all other prevailing surveillance measures being imposed by the Exchanges from time to time".

Ambuja Cements Limited, PC Jeweller Limited, Monarch Networth Capital Limited, and Heranba Industries Limited were other companies that were placed under ASM framework alongwith Adani group firms.

The notification further added the applicable surveillance actions shall be as per provisions of the Short-Term ASM. 

The actions listed by the NSE are:
 

"Applicable rate of margin shall be 50 per cent or existing margin, whichever is higher, subject to maximum rate of margin capped at 100 per cent with effect from February 6, 2023 on all open positions as on February 3, 2023 and new positions created from February 6, 2023."

"Market participants may note that ASM framework shall be in conjunction with all other prevailing surveillance measures being imposed by the Exchanges from time to time. 

Further, it may also be noted that the shortlisting of securities under ASM is purely on account of market surveillance, and it should not be construed as an adverse action against the concerned company/entity." 

What is the Additional Surveillance Measure framework?

The ASM framework was established in 2018. It was put in place to protect retail investors from the unusual movement of stocks and shield them from volatility.

Companies are put under the ASM list for a variety of reasons like unusual price movement, volume variation, etc. When a stock is included in ASM list, it serves as a warning to the investors about unusual activity in the stock.

Once a stock is listed under AMS framework, some trading restrictions are put on these stocks halt unnecesary speculation.

According to the NSE website, if a security, in this case Adani Enterprise and Adani Posts & SEZ, moves into ban period, then the applicable rate of margin in equity segment for such security shall be increased by 15 per cent, subject to the maximum rate of margin capped at 100 per cent.