Adani’s crisis deepens with Moody’s downgrade and index weight reduction – #Adanis #crisis #deepens #Moodys #downgrade #index #weight #reduction
NEW DELHI/SYDNEY/NEW YORK, 10 February (Reuters) – Moody’s cut its rating outlook for some Adani Group companies on Friday, while MSCI said it would reduce their weightings in some stock indexes, the latest blow to the Indian conglomerate. goes into crisis with a short seller report.
New York-based short seller Hindenburg Research, 24 January in the report Adani Group in the manipulation of shares and offshore tax accused him of illegal use of his paradise.
Any law The conglomerate, which has denied wrongdoing, is 110 percent of the value of the 7 listed firms since then billion saw that he had removed the dollar.
The crisis has sparked concerns about a financial crisis in India and protests in parliament, where lawmakers have demanded an investigation.
It also 2.5 in the background of the collapse of the market billion 60-year-old billionaire founder Gautam Adani, who was forced to stop the dollar stock offering, also drew attention to the dwindling wealth.
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On Friday, Moody’s cut the rating outlook for Adani Green Energy (ADNA.NS) from stable to negative; Adani Green Energy Limited Group representing some other divisions; and two subsidiaries of Adani Transmission ( ADAI.NS ).
“These rating actions follow a significant and rapid decline in the market share values of Adani Group companies. “Following the recent release of a short seller’s report highlighting concerns about governance at the group,” Moody’s said.
MSCI has reassessed the size of free floats of some Adani companies, finding that there is “considerable uncertainty” involving some investors in Adani companies. After the feedback from the market participants, he started the research.
Goldman Sachs analysts said in a note that the index provider’s move would increase India’s weighting in MSCI’s Asia or Emerging Markets indices. 20 can reduce by a basis point to 30 basis points, which is 1.7 by the tracker funds billion dollars may cause external.
In another index move, the S&P BSE IPO index will downgrade the conglomerate’s consumer goods company Adani Wilmar as part of its monthly review, according to a statement from S&P and the Bombay Stock Exchange, which did not explain the basis for the move.
Shares of flagship Adani Enterprises ( ADEL.NS ) closed up 4% on Friday after falling 11% a day earlier as MSCI noted the changes. Adani Transmission ( ADAI.NS ) and Adani Total Gas ( ADAG.NS ) fell 5% on Friday, while ACC fell 2%.
India on Friday Ali The court heard petitions raising concerns about steep investor losses caused by the Hindenburg report and said investors needed to be protected.
Chief Justice of India DY Chandrachud said, “The concern here is how to protect the interest of investors.”
The stock market is “also a place of investment by a wide range of middle class,” he added, asking market regulator SEBI to present the existing regulatory framework to the court and explain how investors’ interests will be protected in the future.
The court’s announcement comes at a time of increased regulatory scrutiny of the Adani Group.
Reuters on Friday, citing sources news said SEBI is probing Adani Group’s links with some of the investors who stalled the conglomerate’s $2.5 billion stake sale.
MSCI said it plans to cut index weightings for Adani Total Gas, a joint venture with France’s TotalEnergies ( TTEF.PA ), and Adani Transmission, the power transmission company, along with the group’s flagship firm Adani Enterprises.
It will also reduce the weight of major Indian cement company ACC ( ACC.NS ), which was bought from Switzerland’s Holcim last year but is not one of Adani’s core seven listed firms. 30 of four companies January total weight in the MSCI Emerging Markets Index (.MSCIEF) was 0.4%.
“Low free float will require passive investors to sell stocks to reduce index-tracking errors,” said Brian Freitas, analyst at Periscope Analytics, publishing in Smartkarma.
570 million to sell through passive funds between Adani Enterprises, Adani Total Gas and Adani Transmission on February 28. dollars guessed it would be.
Changes in MSCI indices will be effective from March 1.
Nathan Anderson, founder of Hindenburg, said MSCI’s study was a “validation of our findings”. Adani Group did not respond to a Reuters request for comment on Friday.
Reporting by Reuters Graphics Reuters Graphics Scott Murdoch in Sydney and Rodrigo Campos in New York, Chris Thomas in Bengaluru, Tanvi Mehta and Aditya Kalra in New Delhi; Edited by Edwina Gibbs, Clarence Fernandez and Mark Potter
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Scott Murdoch
2023-02-10 20:17:22
Source – reuters
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