Adani Stock Rout Deepens as MSCI Cuts Free Float of Some Firms

The selloff in Adani Group stocks deepened as MSCI Inc. reduced the amount of shares it considers freely tradable in the public market for four companies in its indexes.

(Bloomberg) — The selloff in Adani Group stocks deepened as MSCI Inc. reduced the amount of shares it considers freely tradable in the public market for four companies in its indexes.

Flagship Adani Enterprises Ltd. pared losses after falling as much as 10%, after the global index provider cut its determined free float for the stock, also making changes for Adani Total Gas Ltd., Adani Transmission Ltd. and ACC Ltd.

The changes will bring down weightings for the stocks in the MSCI Global Standard Index, according to India-based Nuvama Wealth Management, which added that the move would result in hundreds of millions of dollars in outflows from these stocks. Nine of 10 group stocks declined.

Adding to pressure, Norway’s $1.4 trillion sovereign wealth fund on Thursday said it had sold its remaining stake in related companies, while shareholder Life Insurance Corporation of India has said it will engage with the conglomerate’s management soon.

The meltdown following US short seller Hindenburg Research’s damning Jan. 24 report at one point wiped out more than half of the group’s stock market value. The conglomerate has repeatedly denied all allegations of market manipulation and accounting fraud, while founder Gautam Adani and his family have since moved to prepay some borrowings to calm investor nerves.

Shares of Adani Total Gas dropped as much as 5%. The company reported third-quarter net income of 1.5 billion rupees ($18 million), an increase of 17% from a year ago.

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