Adani Group companies are facing challenges as their weightage in the MSCI index has been downgraded by S&P, while Moody’s Investor Services has also downgraded the rating outlook of four Adani Group firms to negative. Despite this, shares of Adani Group firms saw an increase in trade due to ongoing investigations into the company’s relationship. However, this negative development has resulted in the loss of up to $120 billion for investors in Adani Group firms from January 24th to February 10th. Reports suggest that the outflow of Adani shares from passive funds could reach $400 million in the near future.
MSCI has recently announced a decrease in the weighted free float share holdings of some Adani Group companies in its index. This decision was influenced by a report released by US short seller Hindenburg Research on January 24th, which alleged the manipulation of stocks and improper use of offshore tax havens by Adani Group. MSCI has reviewed the free-float size of some Adani Group companies, resulting in a reduction of weightage in Adani Total Gas Ltd. and Adani Enterprises, as well as ACC Ltd.
Due to the reduction in weightage, Adani Group companies have seen a decrease in their stock prices, with Adani Enterprises experiencing a 4% decrease to Rs.1847.35, Adani Power experiencing a 5% decrease to Rs.164.30, Adani Transmission experiencing a 5% decrease to Rs.1186.15, Adani Green NG experiencing a 5% decrease to Rs.723.90, Adani Total Gas experiencing a 5% decrease to Rs.1258.25, Adani Wilmar experiencing a decrease of Rs.4.20 to Rs.436.10, and ACC experiencing a 2% decrease to Rs.1881. It has been predicted that this reduction in weightage could result in a passive fund outflow of 400 million dollars in the coming days.
Market Capitalization Erosion of Selected Companies from January 24, 2023 to February 10, 2023
| Company Name | Market Capitalization – Jan 24, 2023 (in Rs. Crores) | Market Capitalization – Feb 10, 2023 (in Rs. Crores) | Erosion (in Rs. Crores) |
|---|---|---|---|
| Adani Enterprises | Rs.3,92,474 | Rs.2,10,598 | -Rs.1,81,876 |
| Adani Port SEZ | Rs.1,64,354 | Rs.1,26,120 | -Rs.38,234 |
| Adani Power Ltd. | Rs.1,05,988 | Rs.63,369.0 | -Rs.42,619 |
| Adani Transmission | Rs.3,07,446 | Rs.1,32,314 | -Rs.1,75,132 |
| Adani Green Eng | Rs.3,03,113 | Rs.1,14,668 | -Rs.1,88,445 |
| Adani Total Gas | Rs.4,27,325 | Rs.1,38,383 | -Rs.2,88,942 |
| Adani Wilmar Ltd. | Rs.74491.00 | Rs.56,678.0 | -Rs.17,813 |
| Ambuja Cement | Rs.98,994.00 | Rs.71,692.0 | -Rs.27,302 |
| ACC LTD. | Rs.43,871.00 | Rs.35,322.0 | -Rs.8549 |
| NDTV LTD. | Rs.1831.00 | Rs.1345.00 | -Rs.486 |
| Total market cap. | Rs.19,19,888 | Rs.9,50,489 | -Rs.9,69,399 |
Norway’s Sovereign Wealth Fund Divests from Adani Group Companies
Norway’s sovereign wealth fund, with an estimated value of $1.35 trillion, has announced the divestment of its holdings in Adani Group companies. At the end of 2002, the fund had invested approximately $83.6 million in Adani Total Gas, $36.4 million in Adani Ports and Special Economic Zone, and $52.7 million in Adani Green Energy. However, according to the head of ESG Risk Monitoring at the fund, Christopher Wright, the fund no longer has any investment exposure to Adani companies.