Adani Energy Solutions shares tumble over 9%; here’s why
Adani Energy Solutions shares fell 9.3% to ₹975 after MSCI excluded the company from its Global Standard Index, citing concerns over its free float. The stock is now 27.4% below its August peak of ₹1,347.
Shares of Adani Energy Solutions tumbled 9.3% to ₹975 per share in intraday trade on Thursday, November 7 after the MSCI’s latest rebalancing announcement excluded the Adani Group company from its Global Standard Index.
MSCI announced the latest round of its rejig on Thursday, where five Indian stocks were included in the Global Standard Index. However, Adani Energy Solutions was not included in the Global Standard Index.
MSCI attributed the reason behind the non-inclusion of Adani Energy Solutions to concerns surrounding its free float. In a release, MSCI cited publicly available disclosures indicating that Adani Energy Solutions had been issued a show cause notice by the Securities and Exchange Board of India (SEBI) for the potential wrongful categorisation of shareholdings of certain entities.
"As per publicly available disclosures, Adani Energy Solutions has been issued a show cause notice by the Securities and Exchange Board of India (SEBI) for potential wrongful categorisation of shareholding of certain entities," MSCI wrote 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," MSCI said.
MSCI said it continued to monitor Adani Group and associated securities, including those related to free float and would issue further communication if appropriate.
According to the latest shareholding data, promoters hold a 69.9% stake in Adani Energy Solutions, while Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) together own 24.1%, including a 3.42% stake held by the Life Insurance Corporation of India. The remaining shares are held by general public shareholders.
Stock down 27% from recent highs
The company's shares are currently trading 27.4% below their recent peak of ₹1,347 hit in August 2024.
In its most recent Q2 FY25 results, the company reported a 68% year-on-year (YoY) increase in revenue to ₹6,184 crore. EBITDA grew 31% YoY to ₹1,891 crore for the quarter, while profit after tax (PAT) surged 172% YoY to ₹773 crore.
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