All Ten Adani Shares Free Fall By 2-6.5% On February 13; Could MSCI's Indexes Rejig Be The Reason?

All Adani Group-backed stocks traded in deep red on Tuesday with Adani Green Energy and Adani Power taking the worst hit. There are seven Adani-named stocks, while the Group holds two in the cement sector and 1 in the media segment. These stocks toppled in the range of nearly 2% to 6.5%. This also comes after American finance company MSCI announced that it is making no changes in Adani shares when India's weightage climbed to a record high in its index rejig.

Adani Share Prices:

In the early trade, Adani's flagship company, Adani Enterprises dropped by 2.3%, while Adani Ports took the least bearish hit with a downfall of 1.9%. Adani Power touched its 5% lower circuit and Adani Green Energy nosedived by 6.10% respectively.

Meanwhile, Adani Energy Solutions plunged by 3.8%, Adani Total Gas tumbled by 3.91% and Adani Wilmar shed 2.9%.

Cement stocks Ambuja and ACC also dipped by 2.09% and 2.80% respectively. Media stock NDTV plummeted by 4.5%.

MSCI On Adani Shares:

In its latest update on February 12, MSCI said, "In light of continued uncertainty with the free float of Adani Group and associated securities within the MSCI ACWI IMI Indexes, MSCI will not implement any changes in the Foreign Inclusion Factor (FIF) or Number of Shares (NOS) for the related securities as part of the February 2024 Index Review and until otherwise announced."

Also, until otherwise announced, MSCI will review the treatment of non-neutral corporate events for the affected securities on a case-by-case basis and potentially defer their implementation. The treatment of any such non-neutral corporate event would be announced to all clients with advance notice through regular Index announcements. For the avoidance of doubt, MSCI will continue implementing any neutral corporate events including ones requiring application of a Price Adjustment Factor (PAF), it added.

Further, MSCI welcomed feedback from all market participants and investors on these issues and will communicate further as necessary or appropriate.

Uncertainty in Adani shares under the MSCI index escalated after the bombshell report by US-based short seller Hindenburg in late January of 2023, which led to one of the biggest market routs of more than 100 billion dollars on exchanges in the first quarter of that year.

However, Adani shares have been recovering since the Q2 of 2023, and the year 2024 also kickstarted on a bullish note. Last month, the Supreme Court who had directed Sebi to investigate Hindenburg's allegations against the billionaire Gautam Adani and his port-to-power empire, reposed its faith in the market regulator's probe in the matter and said there was no regulatory failure. SC also denied requests seeking for formation of a special investigation team (SIT) or transferring the case to India's top investigator CBI to look deeper into Hindenburg's allegations against the conglomerate. This came as good news for Adani Group as the verdict was in favour of them, shunning Hindenburg's accusation.

However, the case is still not closed, since the apex court also directed Sebi to investigate whether Hindenburg's report violates any Indian market regulations, and if so, to take action accordingly. Further, the court has asked Sebi to expedite its investigation and complete the case in three months.

Hence, with such a clear path for Adani in Hindenburg, investors likely expected some changes in MSCI's stance related to the Group's stocks.

But that has not stopped the majority of Adani stocks from rising in recent times. In the past six months, Adani Enterprises gained by 28.5%, Adani Ports soared by 59%, Adani Power rallied 91%, Adani Green jumped 89%, Adani Energy Solutions zoomed by 90%, Adani Total Gas gained by 59%, Ambuja advanced by 28%, ACC climbed 37%, and NDTV is up by 13% as of now. Only Adani Wilmar shares six-monthly performance is in red with a drop of 11% as of now.

Recently, Adani Group signed huge investment deals to the tune of Rs 62,400 crore which is likely to bring back bulls in the stocks. Further, the expert believes the Hindenburg effect has broadly subsided.

Disclaimer: The write-up is just the latest development in shares and their performances, and is not a recommendation by the author, no GoodReturns.In website and nor Greynium Technologies. Goodreturns.In advises users to consult with certified experts before making any investment decision.