Index provider MSCI seeks feedback on Adani Group over Hindenburg report

PTI, Jan 28, 2023, 6:45 PM IST

New Delhi: Index provider MSCI on Saturday said it has sought feedback on Adani group securities after a report by US-based investment research firm Hindenburg alleged stock manipulation and accounting fraud by the conglomerate.

The index provider said it is aware of the reports recently published regarding the Adani group and associated securities.

”MSCI is closely monitoring publicly available information regarding the situation and the factors that may impact the eligibility of those relevant securities for the MSCI Global Investable Market Indexes,” it said in a statement.

The index provider said it welcomes timely feedback from market participants on these issues.

At present, there are eight Adani group & associates companies which are part of MSCI Standard Index.

Market experts believe any adverse feedback may lead to a reduction in weightage or even exclusion of Adani stocks from the MSCI index.

This might further increase the selling pressure faced by Adani group stocks, which took a beating for the past two trading sessions and lost more than Rs 4.17 lakh crore in the combined market valuation of listed firms.

Market experts believe that MSCI will not take any action until the feedback process is concluded.

On Wednesday, Hindenburg, which specialises in activist short-selling, made allegations of market manipulation and accounting fraud against Adani Group.

The report was released just before Adani group’s flagship company, Adani Enterprises’ Rs 20,000 crore share offering opened to investors. The disclosure led to shares of Adani Group took a beating on the stock exchanges.

The FPO, which opened on January 27, will conclude on January 31.

Hindenburg said its two-year investigation reveals that ”the Rs 17.8 trillion (USD 218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.” Adani Group had said it was shocked to see the report that came out without any attempt to contact it to get the factual matrix.

”The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts,” the ports-to-energy conglomerate had said.

Adani Group said it was shocked to see the report that came out without any attempt to contact it to get the factual matrix.

While the Adani Group said it is examining legal options to take ”punitive action” against Hindenburg Research for its ”reckless” attempt to sabotage a mega share sale at the conglomerate’s flagship firm – a statement that the US activist investor responded by saying it stands by its report that alleged ”brazen” market manipulation and accounting fraud by the group.