Adani Group cos resume slide; Adani Enterprises tumbles 11 pc on MSCI review decision

After recovering for two straight sessions, shares of Adani Group companies resumed their slide on Thursday, with flagship Adani Enterprises slumping nearly 11 per cent as index provider MSCI Inc decided to review the weightage of the conglomerate’s stocks in its indices.

Shares of nine of the 10 group firms closed in the red on the BSE even as the benchmark Sensex rose more than 142 points.

Manish Chowdhury, Head of Research at brokerage Stoxbox, said the group’s stocks have lost around Rs 9.4 lakh crore or about 49 per cent of their combined market capitalisation since January 24.

Adani Enterprises plummeted 10.72 per cent to settle at Rs 1,927.30 per piece on the BSE. The flagship company’s market valuation dived Rs 26,373.92 crore to stand at Rs 2.19 lakh crore.

Deepak Jasani, Head of Retail Research at HDFC Securities, said after rising for the previous two trading sessions, the market capitalisation of the Adani Group companies fell following the MSCI’s decision to review the free float weight of the group companies in its indices.

Adani Ports and Special Economic Zone slipped 2.90 per cent to end at Rs 582.05 and the company’s market capitalisation fell Rs 3,758.64 crore to Rs 1.25 lakh crore.

Adani Power settled lower at Rs 172.90, Adani Transmission at Rs 1,248.55, Adani Green Energy at Rs 761.95 and Adani Total Gas at Rs 1,324.45. The shares of these companies declined 5 per cent each and their closing levels touched the respective lower price bands on the exchange.

During the day, shares of Adani Green Energy and Adani Total Gas also touched their 52-week lows of Rs 761.95 and Rs 1,324.45, respectively.

Besides, stock of Ambuja Cements dropped 6.86 per cent to close at Rs 358, NDTV fell 4.98 per cent to settle at Rs 216.40 and ACC slumped 2.91 per cent to end at Rs 1,915.95 on the BSE.

On the other hand, one Adani group company ended in the green — Adani Wilmar, which climbed 5 per cent to close at its upper price band of Rs 440.30 on the BSE.

”Markets feared that if MSCI lowers the weightings of Adani Group stocks, it may increase the selling pressure on these stocks, as some ETFs and index funds which use MSCI as the benchmark may resort to selling in order to adjust their portfolios,” Chowdhury said.

After US-based short-seller Hindenburg Research came out with an adverse report about the Adani Group on January 24, shares of the group companies have taken a beating on the bourses.

In a statement on Thursday, MSCI Inc said it has received feedback from a range of market participants concerning the eligibility and free float determination of specific securities associated with the Adani Group for the MSCI Global Investable Market Indexes (GIMI).

MSCI defines the free float of a security as the proportion of shares outstanding that is considered available for purchase in the public equity markets by international investors.