MSCI skips Adani Energy's inclusion in Nov rebalancing; share price down 9%

MSCI index rebalancing: Adani Energy Solutions has been issued a show cause notice by the Securities Exchange Board of India (Sebi) for potential wrongful categorisation of shareholding

Adani Energy Solutions share price plunged 9 per cent to Rs 975 on the BSE in Thursday's intraday trade on profit booking after the stock failed to make it to the MSCI India index. In the past two days, the stock of the Adani Group firm had rallied 11 per cent on hopes that it may get included in the MSCI India Standard index. Notably, the MSCI November rebalancing was announced earlier today.

 

The Bombay Stock Exchange Ltd. (BSE), Voltas, Alkem Laboratories, Oberoi Realty, and Kalyan Jewellers were included in the MSCI Global Standard Index as part of the index provider's latest review. The changes in constituents will take place as of the close of November 25, 2024.

 

 

MSCI attributed the non-inclusion for Adani Energy Solutions to concerns surrounding its free float.

 

"As per publicly available disclosures, Adani Energy Solutions has been issued a show cause notice by the Securities Exchange Board of India (Sebi) for potential wrongful categorisation of shareholding of certain entities," MSCI said in its statement.

 

Consequently, in light of the uncertainty regarding its free float, MSCI will not implement any increases in the Number of Shares (NOS), Foreign Inclusion Factor (FIF) and Domestic Inclusion Factor (DIF) for Adani Energy Solutions as part of the November 2024 Index Review and until otherwise announced, it added.

 

MSCI further said it continues to monitor Adani Group and associated securities, including related to free float, and will issue further communication if appropriate. 

 

As on September 30, 2024, promoters of Adani Energy Solutions held a 69.94 per cent stake in the company, shareholding pattern data shows.

 

Meanwhile, in August, Adani Energy Solutions had raised Rs 8,373 crore via qualified institutional placement (QIP), making it the largest fundraise in the Indian power sector. The company allotted 85.79 million equity shares to eligible qualified institutional buyers at the issue price of Rs 976 per equity share.

 

The QIP saw overwhelming demand, receiving bids of approximately 6x of the base deal size from a diverse group of investors, including utility-focused US investors entering India for the first time, sovereign wealth funds, major Indian mutual funds, and insurance companies.

 

The proceeds from the QIP will be utilised for investment in transmission assets, building the bulk evacuation corridors for renewable power. In smart metering business: enhancing energy efficiency and improving network planning and for debt repayment.