- Two Adani group firms, will be dropped out of the MSCI India index, said MSCI Inc. The order will be effective at the close of trading on May 31.
- The MSCI has changed its index’s calculation on the number of shares considered freely tradable in the public market for the two companies.
- The announcement is another setback for the group which is trying hard to regain market confidence to recover from the rout triggered by the Hindenburg report this year.
- The billionaire Gautam Adani’s group is seeking to raise funds, which is seen as a major test of investor confidence in the group.
Global index manager MSCI Inc. will exclude two Adani Group firms from its India gauge, potentially dealing a blow to their stocks that are trying to recover from the rout triggered by a short-seller report earlier this year. Adani Transmission Ltd. and Adani Total Gas Ltd. will drop out of the India index effective at the close of trading on May 31, according to a statement issued by MSCI as a part of its quarterly comprehensive index review.
The announcement is another setback for the group which is trying hard to regain market confidence to recover from the rout triggered by the Hindenburg report this year.
The global index took the decision as part of its quarterly comprehensive index review. The MSCI has changed its index’s calculation on the number of shares considered freely tradable in the public market for the two companies, reported a news agency. Earlier this month, MSCI informed about implementing weighting cuts for Adani Transmission and Adani Total Gas in its indexes. The reduction was initially announced in February, after the release of the Hindenburg report.
Notably, shares of Adani Group firms were trading in green between 1-5 percent. The market cheer for the company came after the group’s flagship company, Adani Enterprises announced plans to raise funds. In the early trade, all 10 Adani group share prices rallied during the morning trade. On Thursday, Adani Transmission Ltd closed 3.15% higher at ₹917 apiece on BSE. Adani Total Gas Ltd shares surged by 2.30% and closed at ₹855.35 per share on BSE.
Hindenburg, in its report, alleged the Adani group of brazen stock manipulation over a long period. The billionaire Gautam Adani’s group is seeking to raise funds, which is seen as a major test of investor confidence in the group. The report by US-based short seller, Hindenburg, had resulted in the wipeout of around more than $150 billion from Adani group’s value at one point. However, the Adani group has denied all the claims.
In recent weeks, the selloff has reduced as Adani’s is attempting to regain its position in the market with the help of a series of investor roadshows, early debt repayments, and plans to scale back its pace of spending on new projects.
(With inputs from agencies)
