Adani Group shares fall following MSCI’s review of its free float, Adani Enterprises drops 18%

MSCI stated that any changes to the free float and market capitalization of Adani Group equities that may affect the computation of these data will be executed and published as part of its February index review, which is scheduled to be issued on Thursday.

Following a two-day bounce, shares of Adani Group firms started trading downward on February 9. MSCI’s disclosure of a review of the proportion of Adani Group-linked shares easily available for trade on public markets sparked the decline.

All ten stocks in the Adani Group fell, with the main business, Adani Enterprises Ltd., falling by up to 15%. The drop came after a 35 percent gain in the preceding two days.

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Other group equities that plummeted include Adani Ports, which fell 7%; Adani Power, which fell 5%; Adani Transmission, which fell 5%; Adani Total Gas Ltd., which fell 5%; Adani Green Energy, which fell 5%; ACC, which fell 3.7 percent; Ambuja Cement, which fell 6.3 percent; and NDTV, which sank 3.7 percent.

MSCI stated that any changes to the free float and market capitalization of Adani Group equities that may affect the computation of these statistics will be executed and published as part of its February index review, which is scheduled to be issued on February 9.

According to analysts, if MSCI decreases its weightings, exchange-traded funds and index funds that use MSCI as a benchmark may have to modify their holdings.

According to Abhilash Pagaria of Nuvama Research, if MSCI cuts the float by 25%, Adani Enterprises will incur a $110 million outflow. He further believes that ACC and Ambuja, which were recently bought by the Adani group, should not be a source of concern in terms of float.

The group’s equities have seen a dramatic rebound in the previous two trading days, with Adani Enterprises up 35% after plummeting more than 55% owing to allegations made by US-based short seller Hindenburg Research. The Adani Group was accused of “stock manipulation and accounting fraud” by the research company, leading the conglomerate’s market value to collapse by more than $117 billion.

The company’s plan to pay off $1.11 billion in loans on shares before their due date in 2024 caused the two-day price rise. Investors reacted positively to the decision, which was bolstered by positive remarks from various lenders about the solvency of Adani Group enterprises. Furthermore, the group’s recent financial reports raised investor confidence even more.