Adani Transmission, Adani Total Gas dropped by MSCI, stocks tumble 5%

• Two Adani group companies, Adani Transmission and Adani Total Gas were dropped by index provider MSCI on Friday in its scheduled quarterly review.
• Following the announcement, both the stocks tumbled by up to 5% each in morning trade.
• The Supreme Court is also expected to deliver its judgement in the Adani-Hindenburg row today.

Two Adani group companies, Adani Transmission and Adani Total Gas were dropped by index provider MSCI on Friday following the scheduled quarterly review in May. Following the announcement, both the stocks tumbled by up to 5% each in morning trade.

“These two securities will no longer be eligible for inclusion in the MSCI Global Investable Market Indexes (GIMI) as the companies will not meet the relevant free float-adjusted market capitalization requirements,” MSCI said in a press release.

As a result of the MSCI index review, the two securities will also be deleted from the MSCI Factor, MSCI ESG, MSCI Thematic and MSCI Capped Indexes, it added.

The deletions of Adani Transmission and Adani Total Gas from the MSCI Global index will come into effect from May 31, 2023. This could result in outflows of up to $201 million and $186 million respectively, according to the analysts at Nuvama Alternative & Quantitative Research.

MSCI announced on Friday last week that it would lower the free float percentage of Adani Transmission to 10%, and Adani Total Gas to 14% in its May index review. The free float of both the companies was at 25% earlier.

MSCI’s indices are used by foreign investors and mutual funds, among others, and the free float cuts in the two Adani group companies could result in outflows of up to $222 million from overseas passive funds, according to IIFL Alternative Research.

Free float refers to the number of outstanding shares that foreign investors can buy or sell in public markets.

Supreme Court judgement in the Adani-Hindenburg row expected today

The Supreme Court is expected to deliver its judgement in the Adani-Hindenburg row on Friday. Ahead of the decision, all the ten Adani group companies experienced volatility, with 9 out of 10 stocks in the red in morning trade.

Company	Current market price	Change in market cap
Adani Total Gas	₹812.3	- ₹5,224 crore
Adani Transmission	₹883.1	- ₹4,233 crore
Adani Green	₹898.55	- ₹2,640 crore
Adani Power	₹240.1	- ₹1,035 crore
Adani Ports & SEZ	₹706.4	- ₹555 crore
Adani Wilmar	₹394	- ₹171 crore
Ambuja Cements	₹411.6	- ₹113 crore
NDTV	₹182.5	- ₹2 crore
Adani Enterprises	₹1,988	₹521 crore
ACC	₹1,824.5	₹722 crore
Total		- ₹12,730 crore

Source: NSE, as on May 12, 2023

Three Adani stocks still down by over 50%

Three Adani group stocks are still down by at least 50% of their value since January 24 which was when US-based Hindenburg Research released its report on the group and said that it has taken short positions on its stocks. Adani Total Gas and Adani Transmission have declined the most, while Adani Power and Adani Ports & SEZ have been the most resilient.

Company	Total decline since January 24
Adani Total Gas	-79%
Adani Transmission	-68%
Adani Green	-53%
Adani Enterprises	-42%
NDTV	-36%
Adani Wilmar	-31%
ACC	-22%
Ambuja Cements	-18%
Adani Power	-13%
Adani Ports & SEZ	-7%

Source: NSE, as on May 12, 2023

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