MSCI cuts weight of four Adani companies after Hindenburg report | Business and economic news

The US-based stock index cut includes Adani Enterprises, the flagship of the consortium led by Indian billionaire Gautam Adani.

US-based stock index compliance agency MSCI says it will weight cut of four Adani Group companies, including flagship Adani Enterprises, in the indices after a reassessment of the number of freely traded shares.

This move comes after a Report January 24 by US short seller Hindenburg Research, accused the Indian corporation of improperly using offshore tax havens and manipulating securities. The group has denied any wrongdoing.

Hindenburg’s report sent the billionaire-led group plummeting Gautam Adaniplunged into crisis, wiping out about $110 billion of the value of the seven major listed companies.

In addition to Adani Enterprises, the coal miner and incubator for the group’s new projects, MSCI also plans to cut shares of Adani Total Gas, a joint venture with France’s TotalEnergies, and Adani Transmission, a company. Electricity transmission.

It will also reduce the weight of ACC, a leading Indian cement company that the Adani Group acquired from Holcim last year and is not one of the group’s seven main listed companies.

Adani Group did not immediately respond to a request for comment from Reuters news agency on Friday.

The four companies had a combined weight of 0.4% in the MSCI emerging markets index as of January 30. The changes took effect on March 1.

“The lower number of free-floating stocks will require passive investors to sell shares to reduce their tracking error,” said Brian Freitas, an analyst with Periscope Analytics who publishes on Smartkarma. with index.

“There may be selling from previous active investors as they try to sell ahead of passive investors.”


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