Index Provider's Relief Opens Potential For Foreign Inflows In Adani Group

Global index provider MSCI's decision to include Adani Group's stocks in its August review opens the potential for foreign inflows for the conglomerate.

The relief marks a comeback for the Adani Group since Hindenburg Research's 2023 allegations. Despite an initial setback, the group had taken big strides since.

The index provider earlier this morning announced it had removed restrictions on the Adani Group and its subsidiary stocks to allow fresh developments in business operations.

"MSCI clarifies that starting from the August 2024 Index Review, MSCI will implement the index review changes, including changes in the number of shares (NOS), Foreign Inclusion Factor (FIF) and Domestic Inclusion (DIF) of Adani Group and associated securities that have been previously postponed," the index provider said in a statement.

Read | Global Index Provider Removes Freeze On Adani Group Stocks

The index provider, which had dropped Adani Energy and Adani Enterprises from the global standard index, also said it'll continue to monitor the Adani Group stocks, including those related to free-float.

It came a day after the markets ignored the US short-seller's latest report that targeted the chief of markets regulator.

The announcement sparked a rally in Adani stocks that went up to 6% in early trade this morning.

The regular implementation of corporate events for these stocks will be effective from September 2, 2024, MSCI said.

The review will increase Adani Energy Solutions' weightage in MSCI coverage as well as align the weightages of other companies' to foreign investments limits.

Read | Adani Stocks Rally Up To 6% After Big Relief From Global Index Provider

The group has raised funds and stepped up expansion process, restoring confidence among its investors. Adani Green, which recently had a fundraise, saw a demand of over Rs 50,000 crore against the issue size of Rs 8,300 crore. It was subscribed six times.

Adani Energy Solutions, too, has proposed $2.2 billion fund-raising through qualified institutional placement in a move that will diversify its shareholder base. Since last year, the group has also attracted investors like GQC Partners and IHC.

In February, Moody's had upgraded the outlook for four Adani Group companies to 'stable' in view of timely payments and their ability to raise funds. The credit ratings agency had then said the Adani group has demonstrated financial strength and ability to raise funds, and has completed a number of debt transactions over the past year.

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