MSCI lifts curbs on Adani group stocks

Global index provider MSCI removed restrictions on Adani stocks that were imposed after the US short-seller Hindenburg Research published its first report against the group in January 2023.
The MSCI decision came despite Hindenburg’s second report that alleged that the Sebi chairperson had investments in the same offshore funds which were used by Vinod Adani, brother of Gautam Adani, to illegally jack up prices. The group had denied all the allegations in the report.
The MSCI decision led to some sharp up moves in some of the Adani group’s stocks.
MSCI said that for Adani group stocks, restrictions related to the changes to the number of shares, foreign inclusion factor and domestic inclusion factor will be implemented as part of its current index review process which will be effective from end August.
Earlier, in February 2023, after the first report by MSCI had come out, MSCI had imposed a freeze on some adjustment factors relating to Adani group’s stocks, especially after the Hindenburg report had cast doubts about the group’s ‘free float status’.
Free float status is defined as those of stocks of a company which are not held by the promoters and are readily available for transfer through the bourses.
Among the laggards from the group’s stocks were flagship Adani Enterprises, down 1.9%, Ambuja Cement, down 1.9%, Adani Wilmar, down 2.4% and Adani Ports & SEZ, down 1.2%.
This was the second consecutive day since the latest Hindenburg report was released that most of the Adani stocks closed lower. However, the selling this time is not as severe as it was after the first report was published.
Between January 25 and end-February, in about five weeks, the total market value of Adani group had plummeted about 65%: from about £192 bn to about £67 bn.