MSCI cuts free float of Adani shares, continuing stock rout

Mumbai (Maharashtra) : As a result of MSCI’s announcement that it would be decreasing the amount of freely tradable shares in its calculation, the stock prices of companies within the Adani Group fell significantly. The market has become even more volatile as a result of analysts’ predictions that the weightages will be lowered as a result of this news.

Shares of Adani Enterprises were down 8%, Adani Total Gas was down 6.4%, Adani Transmission was down 5%, Adani Power was down 5%, and Adani Wilmar was down 3%. Adani Green Energy was down 3%, ACC was down 2%, NDTV was down 2.6%, and Ambuja Cement was down 0.3%. However, Adani Ports was up 0.5%.

Adani Enterprises Ltd., Adani Transmission Ltd., Adani Total Gas Ltd., and ACC Ltd. have all heard that MSCI is going to change their free float. On February 28th, these adjustments will go into effect.

Nuvama Wealth Management has released a note stating that Adani Enterprises’ inclusion in the MSCI Global Standard Index will be reduced by 30 basis points, to 0.5 percent. The note also predicted that the other three stocks would see declining weightings, which could lead to outflows of around $500 million.

Following allegations made by US-based research firm Hindenburg Research on January 24th, Adani Group company shares have dropped significantly. Over $117 billion in market capitalization has been wiped out of the Adani Group due to allegations of “stock manipulation and accounting fraud.” The allegations have caused substantial market uncertainty, which has hurt the performance of the stocks.

While Biocon has been removed from the MSCI India index, MSCI has announced the addition of Bank of Baroda and CG Power & Industrial Solutions. So, according to Nuvama Alternative & Quantitative Research, CG Power and Bank of Baroda might get $161 and $145 million, respectively. However, the same note predicts that Biocon could lose as much as $68 million.