Index provider MSCI’s decision to review the volume of Adani Group-linked stocks that are freely tradable in public markets has brought cheers from Hindenburg Research. The development comes more than two weeks after a US-based short seller made a flurry of allegations against the Indian conglomerate, leading to a sharp fall in Adani Group shares.
“Following Adani’s review, MSCI just announced: ‘There is sufficient uncertainty in the characteristics of some investors that they should no longer be designated as free float in accordance with our methodology.’ We see this as validation of our findings on offshore stock parking by Adani,” Hindenburg founder Nathan Anderson tweeted.
The company last month issued a report alleging stock manipulation and improper use of tax havens by the Adani Ports-to-Energy group. It also claimed that the group had unsustainable debt.
Nine out of 10 group stocks declined on Thursday, with flagship Adani Enterprises plunging up to 20% in early trade. The group’s market value has fallen sharply over the past two weeks, with losses reaching $117 billion at one point.
The group has vehemently denied the allegations, even threatening to take action against Hindenburg. Gautam Adani’s business empire recently recovered some of its lost value this week after pledging to repay $1.1 billion in early loans.
But while the move appeared to reassure investors for a while, the numbers took a beating in the wake of MSCI’s update on Thursday. France’s TotalEnergies has put on hold a planned investment in Adani Group’s USD 50 billion hydrogen project, pending audit results.
Meanwhile, the Supreme Court is set to hear a plea seeking direction to the Center to set up a committee under the supervision of a retired judge of the apex court to examine and probe the Hindenburg Research report.
(with inputs from agencies)
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