Adani Power shares experienced a significant drop, falling over 1%, due to MSCI reducing the float in the company. This reduction follows a show cause notice issued by the Securities Exchange Board of India (SEBI) to Adani Energy Solutions regarding potential misclassification of shareholding. The uncertainty surrounding the free float led MSCI to hold off on increasing the number of shares and inclusion factor for Adani Power in its November review. Nuvama estimates this weightage reduction will result in approximately $111 million in outflows from passive funds.
MSCI’s decision also impacted Adani Green Energy, with shares falling 3% and an estimated $173 million outflow due to the float reduction. The index provider is closely monitoring the Adani Group and related securities for free float concerns and will communicate further updates as needed. This action stems from a broader investigation into Adani Energy Solutions, which received a show cause notice from SEBI last month alleging improper categorization of certain entities’ shareholding as public.
The market reacted negatively to the news, with Adani Energy Solutions shares plummeting over 10% to Rs 963.80 at market close. This significant drop reflects investor concern regarding the ongoing regulatory scrutiny and potential impact on the Adani Group. While MSCI increased the weightage of HDFC Bank, potentially leading to a $1.9 billion inflow, the negative sentiment surrounding Adani Power overshadowed this positive development. The exclusion of Adani Energy Solutions from the MSCI Global Standard Index, coupled with the SEBI investigation, contributed to the decline in Adani Power shares. Investors are closely watching for further developments and communications from both SEBI and MSCI regarding the Adani Group.
