After reshuffle, FTSE intends to go ahead with index review changes for Adani shares

on Friday, ftse “Wish to confirm that it intends to proceed with the index review changes scheduled for Adani Group (India) and its affiliated securities, effective Monday, March 20, 2023,” it said.

This will include all members and weight changes determined within the market cap and non-market cap index.

However, the exchange, informally known as ‘Footsie’, also noted that trading in Adani Group (India) and its associated securities are currently restricted due to the hit of respective daily price limits.

Should such a restriction compromise the replication of the indices in the upcoming March 2023 rebalancing? To this, FTSE said, it will review on a case-by-case basis and announce any updates prior to the review in line with index policy in case a client is unable to trade a market or security.

Earlier this week, FTSE Russell added 10 Indian stocks to its Global Large-Cap Index as part of its semi-annual index review.

Adani’s cement company ACC, which is majorly owned through Ambuja Cement, is included in the list of 10 Indian stocks.

Adani holds 63.15% stake in Ambuja Cement, which in turn owns 50.05% in ACC Limited. Adani directly holds 6.64% stake in ACC.

Other Indian stocks included in the large-cap index list by FTSE are — Kotak Mahindra Bank, Canara Bank, IDBI Bank, Yes Bank, Union Bank of India, Indian Hotels, Jindal Steel & Power, Shriram Finance, Trent, and Tube Investments .

ACC, Canara Bank, Shriram Finance, Yes Bank and JSPL entered the large-cap list after being pulled out of the mid-cap list.

However, FTSE Russell did not take any action on Adani shares in its half-yearly index review.

Earlier, on January 31, following the Adani-Hindenburg controversy, the London-based exchange advised that the Adani index constituents within the FTSE Russell indices would continue to be eligible following the underlying index’s methodology (subject to meeting all index inclusion criteria).

However, FTSE also said that it would continue to monitor publicly available information about the company, in particular by Indian regulatory authorities, for any developments.

“Following the announcement of the index on 31 January 2023, FTSE is monitoring and reviewing publicly available information relating to Russell Adani Group (India) and its associated securities,” FTSE said on Friday.

Adani’s shares faced massive overvault on the exchanges after reports of US-based short-sellers surfaced in late January this year. The so-called Hindenburg Report accused billionaire Gautam Adani’s group of fraud, stock manipulation and tax evasion.

This opened a Pandora’s box for Adani, with the case sparking street protests by opposition parties, a free-fall in securities, and billions of dollars in wealth loss, not only in the group’s shares, but also in those companies. who are at risk. Them. Adani also came under the radar of the regulatory authorities.

Now, the case of Adani and Hindenburg is being heard before the Supreme Court in India.

Currently, the apex court is contemplating to form a committee that can assess the market regulatory framework and recommend measures that can be adopted to protect investors in the wake of the Adani-Hindenburg case. On Friday, the court refused to take suggestions on the panel of experts in a ‘sealed cover’ and assured of complete transparency.