Aftermarket participants voiced concerns over the eligibility of the Indian conglomerate’s companies for certain of its indexes, index provider MSCI announced on Thursday that it had decided that some Adani stocks should no longer be labelled as free float.
It stated that as part of its routine assessment for February, changes for Adani securities linked to its MSCI Global Investable Market Indexes are scheduled to be released on Thursday.
Since U.S. short-seller Hindenburg Research released a report on Jan. 24 accusing the company of inappropriate use of offshore tax havens and stock manipulation, the organisation headed by billionaire Gautam Adani has been mired in trouble. Additionally, it expressed concern about high debt levels and what it claimed were inflated valuations.
The Adani Group has refuted the claims, claiming that the stock manipulation story put up by the short seller has “no validity” and is the result of a misunderstanding of Indian legislation. The percentage of outstanding shares that foreign investors believe to be available for purchase on public stock markets is known as a security’s free float according to MSCI.
Nathan Anderson, the founder of Hindenburg, tweeted in response to the MSCI statement: “We regard this as validation of our findings.”
Adani’s seven primary listed companies lost $110 billion in value as a result of the investigation and its fallout, and its parent company Adani Enterprises was compelled to cancel a $2.5 billion stock offering. Despite some of the companies’ shares recovering this week, they fell once more on Thursday.
After recovering from recent losses to multi-year lows, Adani Enterprises shares fell 10% in early trading. According to Hindenburg, it has short positions in Adani’s derivatives and bonds that are traded outside of India and the United States.
Following the Hindenburg report, the Adani Companies stated in papers on Tuesday that the company was thinking about having an outside assessment of the problems with legal compliance, related party activities, and internal controls.
