Adani Energy shares fall 9% on getting bad news from MSCI

Shares of Adani Energy Solutions on Thursday fell up to 9% to Rs 978 on BSE after global index services provider MSCI failed to include the stock in MSCI Global Standard Index citing an earlier show cause notice from Sebi in the wake of allegations made by Hindenburg.

The Street was expecting Adani Energy to get included in the global index as part of its periodic rejig where 5 Indian stocks were included – Voltas, BSE, Kalyan Jewellers, Oberoi Realty and Alkem Labs.

“As per publicly available disclosures, Adani Energy Solutions has been issued a show cause notice by the Securities Exchange Board of India (SEBI) for potential wrongful categorization of shareholding of certain entities,” MSCI said.

Consequently, in light of the uncertainty regarding its free float, MSCI said it will not implement any increases in the number of shares, foreign and domestic inclusion factor for the stock as part of its November review.

MSCI continues to monitor Adani Group and associated securities, including related to free float, and will issue further communication if appropriate, it said.

Earlier last month, the company had informed exchanges that it has received a show cause notice from Sebi alleging wrongful categorization of shareholding of certain entities as public shareholding.Besides, MSCI has also reduced the float in two other entities – Adani Green Energy and Adani Power. Shares of Adani Green Energy fell 3% as Nuvama estimates that the weightage reduction will lead to outflows of about $173 million from passive funds.Similarly, shares of Adani Power also fell over 1% with Nuvama expecting an outflow of around $111 million from the counter.

In the meantime, MSCI has raised the weightage of HDFC Bank which could potentially result in an inflow of approximately $1.9 billion.