The US-based stock index compiler’s cut includes Adani Enterprises, the flagship company of the group led by Indian billionaire Gautam Adani.
US-based stock index compiler MSCI says it cut the weights of four Adani Group companies, including its flagship Adani Enterprises, in its indexes after reassessing the number of freely traded shares.
The move comes after a January 24 report by US short seller Hindenburg Research, which accused the Indian conglomerate of misuse of offshore tax havens and stock market manipulation. The group has denied any wrongdoing.
The Hindenburg report plunged the group, led by the billionaire Gautam Adaniin crisis, wiping out some $110 billion of the value of its top seven listed companies.
In addition to Adani Enterprises – the group’s coal miner-incubator for new projects, MSCI also plans to reduce weightings in Adani Total Gas – a joint venture with France’s TotalEnergies and Adani Transmission, a power transmission company .
It will also reduce the weight of ACC, an Indian cement leader which the Adani Group acquired from Holcim last year and which is not among the group’s seven main listed companies.
Adani Group did not immediately respond to a request for comment from Reuters news agency on Friday.
The four companies had a combined weighting of 0.4% in the MSCI Emerging Markets Index as of January 30. The changes come into effect on March 1.
“The lower free float will force passive investors to sell stocks to reduce their tracking error with the index,” said Brian Freitas, an analyst at Periscope Analytics who publishes on Smartkarma.
“There could be selling from active investors before that, because they’re trying to sell before passives.”