Adani Stock in focus: Three Adani Group entities viz. Adani Power, Adani Transmission and Adani Total Gas are expected to be removed from Morgan Stanley Capital International (MSCI) India index during the rebalancing exercise in May following a sharp correction in their stock prices, a report read.

Morgan Stanley Capital International has said that it will postpone the implementation of updates to weightings for 2 of Adani Group companies, Adani Total Gas and Adani Transmission, to the May benchmark review.

According to MSCI, the adjustments to Adani Total Gas and Adani Transmission that were made as part of the February index review would be reversed commencing on February 16.

Starting in February, the index provider will also provide all related securities with the Adani Group a special treatment in the MSCI Equity Indexes.

Shares of Adani Total Gas initially rose today before falling 1.8% down. The company's shares have fallen over 70% since a negative report by US-based short-seller Hindenburg Research in late January. Shares of Adani Transmission increased by 1%, and other Adani group firms also saw higher trading.

After re-evaluating the number of shares that are openly traded, MSCI announced last week that it would reduce the weightings of four Adani Group firms, including flagship company Adani Enterprises, in its indexes.

The proposed adjustments to Adani Total Gas and Adani Transmission will not be implemented until May, despite the fact that the revised index weightings were supposed to take effect on March 1.

The decision was made because to "possible replicability difficulties," according to MSCI. In accordance with its methodology, indexes must be duplicated "in a real portfolio in a cost-effective manner."

Adani Enterprises and ACC, a significant Indian cement manufacturer that the Adani Group acquired Holcim last year, will continue to have their weightings adjusted. After deciding there was "significant ambiguity" around some investors in Adani companies, MSCI looked at the magnitude of the free floats of various companies.

After Hindenburg accused the Indian giant of improperly using offshore tax havens and stock manipulation, MSCI made its decision. The group has denied doing anything improper.

The Hindenburg Research report has plunged Adani, led by billionaire Gautam Adani, into crisis, wiping some USD 120 billion off the value of the group's companies.

Adani and two of its major subsidiaries caught up in the short-selling storm in recent weeks are to hold calls with bond investors on 16 and 21 February.

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