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Adani Group Shares Remain in MSCI Index After Quarterly Review

Adani faces new risks as MSCI checks the free float of its shares.

Stocks related to Adani Group were not removed from the MSCI Inc indexes. The Indian conglomerate continues to grapple with the fallout from a short-selling campaign that wiped off nearly half of its market value in just two weeks.

In its latest review, it was not immediately clear whether the index provider had adjusted the weighting of any of the group’s stocks in its equity measure. MSCI said on Wednesday it was reviewing the number of shares linked to the group that are freely tradeable on the open market.

The review has drawn market attention back to a key Hindenburg Research allegation: that offshore shell companies and funds linked to the Adani Group constitute many of the largest “public” or non-insider holders of Adani shares.

Billionaire Gautam Adani’s company suffered a stock crash, wiping $117 billion off its market value at one point after Hindenburg accused the company of accounting fraud and market manipulation, allegations the group vehemently denies. The group’s flagship Adani Enterprises, was forced to stop selling key shares within 11th hours and put its first-ever public offering of bonds on hold.

Adani Group has recently stepped up measures to reassure investors and banks by repaying loans and promising to reduce debt ratios. The group’s dollar debt collapse has attracted buyers, including Oaktree Capital Management and Davidson Kempner Capital Management.

The fallout from the sell-off is spreading widely amid growing concerns about the exposure of financial institutions and investors to Adani. The uproar has disrupted Parliament and India’s main opposition party, pressuring Prime Minister Narendra Modi over his silence on the issue.

Except for Adani Wilmar Ltd and New Delhi Television Ltd (NDTV), all Adani group entities are part of MSCI’s critical indicators for Asia-Pacific, emerging markets and India, according to data compiled by Bloomberg.

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