Shares of Adani group companies declined on Thursday after two consecutive sessions of gains. Shares tumbled – with flagship Adani Enterprises plunging 10.7% on the BSE to ₹1,927.30 – on Thursday as global index provider MSCI informed the market that it was reviewing shares of group firms that were free-float. were in public market.
“MSCI has determined that there is sufficient uncertainty in the characteristics of certain investors that they should no longer be designated as free float in accordance with our methodology,” MSCI said on Thursday. “This determination has triggered a free float review of securities of the Adani Group,” it said.
Following the MSCI statement, shares of 10 listed firms belonging to the Gujarat-based group came under pressure and nine firms saw their shares fall between 3% and 10%, while only Adani Wilmar ended in the green, down 5%. Climbed on.
Following MSCI’s statement, Nathan Anderson, founder of US-based Hindenburg Research, responded on Twitter saying, “We view this as a validation of our findings.”
According to market sources, eight out of 10 Adani Group stocks are part of the MSCI index, with passive investments of around $2 billion and any adverse decision by the index provider is likely to put more pressure on the shares in the coming days .
MSCI’s review of Adani shares comes after a scathing report released by Hindenburg Research on January 24, alleging “accounting fraud and stock price manipulation”, while raising concerns about the group’s “substantial debt”.
The allegations have been strongly denied by the group. S&P Global Ratings downgraded Adani Ports and Special Economic Zone, and Adani Electricity from “stable” to “negative”. and TotalEnergies freezes its $4 billion investment in Adani Group for hydrogen manufacturing
Norway’s sovereign wealth fund said on Thursday that it has sold its stake in three Adani group companies since the beginning of the year, worth about $200 million, according to a Reuters report.
At the end of 2022, the fund had holdings of $1.35 trillion in Adani Total Gas, Adani Ports and Special Economic Zone and Adani Green Energy.
“Since the end of the year, we have further reduced Adani companies. We have no risk left,” Christopher Wright, the fund’s head of ESG risk monitoring, was quoted as saying by Reuters.
“We have monitored Adani for many years (on ESG), [and] on dealing with environmental risks,” he said.
(with inputs from Reuters)