FTSE Russell says monitoring Adani report, group stocks stay eligible

FTSE Russell, a global index provider, said it was aware of short-seller Hindenburg Research's report on the Adani Group and associated securities and that it was monitoring the information. The global index publisher said Adani constituents within the FTSE Russell indices will continue to remain eligible in accordance with the underlying index methodologies.

"FTSE Russell notes the media reports regarding the Adani Group (India) and its associated securities. FTSE Russell would like to advise that the Adani index constituents within the FTSE Russell indices will continue to remain eligible in accordance with the underlying index methodologies (subject to satisfying all index inclusion criteria)," it said on its web portal.

However, FTSE Russell said, it continues to monitor publicly available information on the company, in particular by the Indian regulatory authorities, for any developments.

Hindenburg has made many allegations on Adani group including accounting frauds, stock manipulations and money laundering, while revealing that it has gone short on Adani group stocks. This made rating agencies and global index providers to take note.

Earlier, a report by Nuvama Institutional Equities suggested that Adani group stocks namely Adani Total Gas, Adani Entertainment, Adani Transmission, Adani Green, Adani Ports & SEZ, Adani Ports, Adani Power and shares of two recently acquired companies ACC and Ambuja Cements, which are constituents of MSCI Standard index, could see an up to $1.5 billion in total outflows.

This is if the index provider MSCI decides to reduce the weight of these Adani shares by half, said Nuvama Institutional Equities.  

The cumulative weight of all these stocks in the index stands at 5.75 per cent, as per Nuvama's assumption of passive tracking. The cumulative value of eight names stands at $3.5 billion, as of January 27, the brokerage said.

Also read: Budget 2023: 5 things that stock investors are looking for

Also read: Hindenburg effect: Adani Power shares slip 18% in four days; trading in oversold zone