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The U.S.-based stock index complier’s decline includes Adani Enterprises, the parent company of the group led by Indian billionaire Gautam Adani.
US-based stock index compiler MSI said it would reduce the weighting of four Adani Group companies, including its parent company Adani Enterprises, by reassessing the number of free-traded shares.
The move comes after US short-seller Hindenburg Research on January 24 accused India’s Congress of abusing offshore tax havens and stock manipulation. The group said it had committed no wrongdoing.
The Hindenburg report plunged the group, led by billionaire Gautam Adani, into crisis, wiping $110 billion off the value of its top seven companies.
Apart from Adani Enterprises – the group’s coal-miner-cum-incubator for new projects, MSCI also plans to underweight Adani’s Total Gas – along with France’s Total Energy and Adani Transmission Co.
Adani Group will also de-weight Indian cement company ACCC, which it acquired from Holcim last year and which is not one of the group’s top seven listed firms.
Adani Group did not immediately respond to a request for comment from Reuters news agency on Friday.
In the year As of January 30, the four companies had a 0.4 percent weighting in the MSCI emerging markets index. The changes will take effect on March 1.
“The minimum free float requires investors to sell stocks to reduce their tracking error with the index,” said Brian Freitas, an analyst at Periscope Analytics who publishes on SmartKarma.
“There may be selling from active investors before they try to sell before execution.”
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