MSCI to review free float of Gautam Adani group shares

Adani Enterprises Ltd, the group's flagship stock, fell as much as 10% after gaining 35% in the prior two trading sessions


New Delhi : The Adani group’s share price fell at the open of trading on Thursday morning, ending a two-day reprieve, after MSCI Inc announced it was reviewing the number of freely tradable shares linked to the Adani group.

Adani Enterprises Ltd, the group’s flagship stock, fell as much as 10% after gaining 35% in the prior two trading sessions. A critical report published by US short-seller Hindenburg Research two weeks ago caused a precipitous drop in the group’s market value, which could reach as high as $117 billion.

MSCI stated that any adjustments to the so-called free float and market capitalization of the Adani group stocks would be implemented and announced in Thursday’s release of the February review of the indexes.

There is no way to spin this in a positive light for the Adani Group companies; today could see the reversal of a lot of the recent gains. The research note was written by Smartkarma analyst Brian Freitas. There will be a lot of passive buying and selling going on.

Gautam Adani, a billionaire, has been taking more action to reassure investors and banks by repaying loans and promising to reduce debt ratios, and the decline in the group’s dollar debt has attracted buyers like Oaktree Capital Management and Davidson Kempner Capital Management.

Due to the reluctance of some financial institutions to refinance the debt in light of the Hindenburg report, the Adani group has decided to prepay a $500 million bridge loan queue next month. Adani borrowed $4.5 billion from a number of banks last year to fund its acquisition of Holcim Ltd.’s cement assets, including Barclays Plc, Standard Chartered Plc, and Deutsche Bank AG. On March 9th, repayment is required for a chunk of that loan.