The Adani Group is facing further trouble as Adani Enterprises, the group’s flagship company, was dropped from the Dow Jones Sustainability Indices starting February 7. This move came after allegations of fraud and stock manipulation, and was based on a media and stakeholder analysis conducted by S&P Dow Jones Indices, a provider of well-known financial market indicators.
The S&P Dow Jones Sustainability Indices announced the removal of Adani Enterprises (XBOM: 512599) from the indices in a statement, citing the result of a media and stakeholder analysis triggered by allegations of stock manipulation and accounting fraud.
“Effective prior to the opening on February 7, 2023, the following changes will be made to the Dow Jones Sustainability Indices by S&P Dow Jones Indices,” as per the index announcement.
The decision by the S&P Dow Jones Sustainability Index was triggered by a sharp drop in the shares of companies belonging to billionaire Gautam Adani’s group, following a scathing report by US short-seller Hindenburg Research.
The stocks of the Adani group have faced intense selling pressure following a report from US-based short-seller Hindenburg Research raising concerns about the debut positioning of Adani’s companies. In the past six sessions, the share price of Adani Enterprises on NSE has plummeted from ₹3,442 to ₹1,565, a decline of approximately 55%.
Following the sharp decline in Adani Enterprises shares, Chairman Gautam Adani announced the withdrawal of the planned follow-on public offering of Adani Enterprises Ltd, which was expected to generate ₹20,000 crore in net proceeds for the company.
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The situation has worsened further with the bonds of the Adani group experiencing a sharp decline in the global markets, potentially causing fear among shareholders of Adani’s companies.
On Thursday, NSE announced the inclusion of three Adani group stocks in the AMS list, citing “Additional Surveillance Measures (ASM) will be implemented on securities with surveillance concerns based on objective parameters such as Price/Volume variation and Volatility.”