Adani group stocks snap 2-day winning streak to trade in the red

• Except Adani Wilmar, all nine Adani group companies were trading in the red on Thursday.
• Early on Thursday, MSCI said it will announce changes in free float status of some Adani securities.
• On Friday, Supreme Court will hear a plea seeking probe into Hindenburg Research report on Adani group companies

After two days of gains in the equity markets, Adani group stocks tanked on Thursday. Except for Adani Wilmar, all the nine Adani group companies were trading in the red.

Adani Enterprises, which has been leading the rally in the last two sessions, slumped as much as 20% in early trade but recovered slightly in the afternoon. As of 1:30 pm, it was down by 10.9%.

While Adani Wilmar was supported by the 15% growth in net profit it posted for the third quarter, Adani Power suffered as its third-quarter net profit plunged 96% to ₹9 crore, on account of increased expenses. Both these companies reported earnings on Wednesday.

Overall the stock markets were volatile on Thursday. Having opened in the red, tracking losses in the US, European and Asian markets, the Sensex was up 128 points and the Nifty50 rose 13 points as of 2:52 pm.


Source: NSE

Adani group stocks have been extremely volatile in the last few weeks ever since US-based research firm Hindenburg released an explosive report alleging that the group had engaged in stock manipulation and accounting fraud. The firm also said that it has taken a short position on the group’s US-listed securities.

After suffering setbacks – including canceling Adani Enterprises’ ₹20,000 crore follow-on public offer or FPO after it was fully subscribed, the group announced on Monday that it will prepay $1.1 billion for the release of its pledged shares ahead of maturity in September 2024.

This was followed by two trading sessions of gains on Tuesday and Wednesday, when the stocks recovered as much as ₹70,000 crore in combined market cap.

MSCI to change Adani group companies’ free-float status

Early on Thursday, index provider MSCI said it will announce changes in the free-float status in some Adani securities. “MSCI has determined that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float as per our methodology,” said MSCI in a statement.

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

This was after it received feedback from market participants concerning the eligibility and free- float determination of some of the group’s securities, said the US-based firm in a statement.

Last week, Dow Jones said it would drop the group’s flagship company Adani Enterprises from its sustainability indices, after Hindenburg’s allegations.

The stocks could be under pressure going ahead too as India’s apex court gets ready to hear a plea on Friday — seeking a direction to the Centre to constitute a committee to investigate into the Hindenburg report.

The public interest litigation filed by advocate Vishal Tiwari, also sought directions to set up a special committee to oversee the sanction policy for loans of over ₹500 crore given to big corporations.

(With inputs from PTI)

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