Investing.com - Adani Enterprises Ltd (NS:ADEL), led by Gautam Adani, has experienced a significant decrease in market value this week following the removal of two entities from MSCI (NYSE:MSCI) indexes and apprehensions regarding dilution from an upcoming fundraising effort. This marks the group's worst financial week since late February.
Adani Total Gas Ltd (NS:ADAG) and Adani Transmission Ltd (NS:ADAI) are set to be removed from the MSCI indexes, resulting in a combined loss of nearly $10.1 billion in market value for the company. The consequences of these exclusions could lead to sell-offs worth approximately $390 million by global passive funds later this month, according to independent equities analyst Brian Freitas.
Additionally, flagship firm Adani Enterprises is expected to suffer its largest weekly decline since March at almost 4%. Both the company and its transmission unit announced plans last week to raise $2.6 billion through either qualified institutional placements or other methods – causing investor concerns about potential equity dilution.
Fund manager Arpit Shah from Care Portfolio Managers expressed worries that if shares were priced too low during a QIP issue it might indicate weakness or desperation within the company.
In January, fraud allegations made by Hindenburg Research had caused more than $150 billion in losses for the group’s market value up until late February. However, some of these losses have been recovered over recent months due to GQG Partners' early March investment into four separate entities belonging to Adani Group.
Despite denying Hindenburg Research's claims against them earlier this year, steps have been taken by the conglomerate aiming to ease shareholder concerns surrounding debt levels and corporate governance issues.