MSCI lifts freeze on Adani Group stocks amid Hindenburg row

Global index service provider Morgan Stanley Capital Investment (MSCI) on Tuesday (August 13) announced that it is lifting the freeze on Adani Group and its subsidiary stocks.

The announcement comes amid fresh claims by short-seller Hindenburg Research that a conflict of interest was preventing SEBI chairperson Madhabi Puri Buch from doing a thorough probe into allegations of stock manipulation by the Adani Group.

What are the changes?

The changes, set to be implemented with the August 2024 Index Review, will include updates to the Number of Shares (NOS), Foreign Inclusion Factor (FIF), and Domestic Inclusion Factor (DIF) for the Adani Group and its associated securities.

“MSCI continues to monitor Adani Group and associated securities, including those related to free float, and will issue further communication if appropriate,” a statement issued by MSCI said.

The MSCI, which had removed Adani Energy and Adani Enterprises from the global standard index, also said that it will consider a fundraiser for both the companies.

Surge in shares

The MSCI’s announcement led to a surge in Adani Group shares – which had declined sharply during intra-day on Monday – by 5 per cent.

While both SEBI chief and Adani Group rubbished the Hindenburg Report, shares of Adani Enterprises Ltd, the group’s flagship company slumped as much as 5.5 per cent in early trading on Monday while Adani Energy Solutions Ltd plunged 17 per cent as all of the conglomerate's 10 stocks traded lower. But the stocks pared bulk of the losses during the day.

At the close of trade, Adani Green Energy Ltd as well as Ambuja Cement Ltd ended in green. Taken together, the Adani stocks lost ₹22,064 crore in market capitalisation.

SEBI chief, Adani Group deny allegations

Buch and her husband on Sunday issued a statement calling Hindenburg's latest report as an attack on the credibility of SEBI and attempted "character assassination".

Buch and her husband Dhaval Buch in a joint statement on Sunday said the investments were made in 2015, well before her appointment as a whole-time member of SEBI in 2017 and the subsequent elevation as chairperson in March 2022, and in capacity as "private citizens living in Singapore". These funds became "dormant" on her appointment in SEBI.

"Sebi was tasked with investigating investment funds relating to the Adani matter, which would include funds Ms Buch was personally invested in and funds by the same sponsor which were specifically highlighted in our original report. This is obviously a massive conflict of interest," Hindenburg said.

The Adani Group has also termed Hindenburg Research's allegations as malicious and manipulative of select public information, saying it has no commercial relationship with the SEBI chairperson or her husband.