Gautam AdaniImage Credit source: File Photo
After the Hindenburg Research report, the shares of Adani Group are facing huge losses and the trend of falling shares is still going on. In such a situation, it has now come to light that this time the shares of Adani Group are facing losses due to the decision of MSCI (Morgan Stanley Capital International). It seems that Adani Group companies may face another challenge in May 2023 after the exclusion of Adani Total Gas and Adani Transmission from the Morgan Stanley Capital International (MSCI) index.
According to sources, a decision has been taken to exclude Adani Total Gas and Adani Transmission from the MSCI India Index from May 31. After this decision, there has been a big fall in the shares of Adani Group this week and there has been a loss of $ 10 billion. Fund raising plans of Adani Group companies are also likely to be eclipsed. Because of this, investors are still scared.
Adani shares recorded their worst week since February 2023 as Gautam Adani-led companies lost over $10 billion in market cap in the week. Adani Group’s market capitalization jumped from $10.1 billion to around $107 billion in the past week, with Adani Total Gas and Adani Transmission, the two stocks to be dropped by MSCI, heading for their worst weeks since late February.
Adani Enterprises incurred a loss of 4 percent.
Adani Enterprises, the flagship company of Adani Group, has recorded the highest weekly loss of 4 percent since March. The company and its transmission unit last week launched plans to raise $2.6 billion through qualified institutional placement or other means, raising concerns of equity dilution. If the share price in the QIP issue is very low, it can be seen as a sign of weakness or desperation.
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Stake was bought in four institutions in March
A Hindenburg Research report on Adani Group companies in January showed more than $150 billion eroded from the group’s market valuation by the end of February. These losses were pared down during the past two months as emerging market investor GQG Partners made a March Initially, stake was bought in four institutions. Due to this, recovery was seen in some shares of Adani Group.
Apart from this, Adani Group also got the benefit of organizing roadshows to reduce debt or win the trust of investors. Despite this, the loss of market-cap is currently around $ 128 billion. However, Gautam Adani and his lieutenants are denying the allegations made by the American short seller, taking steps after the report to address investors’ concerns over the fleet loan and corporate governance.