Norway’s $1.35-trillion sovereign wealth fund said on February 9 that it has in recent weeks divested virtually all its remaining shares in companies belonging to the embattled Adani Group amid massive volatility in the conglomerate’s stocks , news agency Reuters reported.
“We have monitored Adani for many years (on ESG) issues, many on their handling of environmental risks,” Christopher Wright, the fund’s head of ESG risk monitoring, told a news conference.
The fund had divested from five Adani companies since 2014 and at the end of 2022, it remained invested in three, including Adani Ports.
“Since year-end, we have further reduced in Adani companies. We have no exposure left,” he said.
At the end of 2022, the Norwegian fund held shares in Adani Green Energy worth $52.7 million, a stake in Adani Total Gas worth $83.6 million and ownership in Adani Ports & Special Economic Zone worth $63.4 million.
Adani Group stocks have been facing intense volatility since US-based short seller Hindenburg Research had on January 24 alleged improper use of offshore tax havens and concerns about high debt, which Adani denied, but the subsequent market meltdown has led to a dramatic and sudden fall in group chairman Gautam Adani’s fortunes, with $110 billion wiped off his seven main Indian-listed stocks in slightly more than two weeks .
Meanwhile, financial index provider MSCI earlier today said that some Adani securities should no longer be designated as free float, after market participants raised concerns about the eligibility of its indexes.
“MSCI has determined that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float … This determination has triggered a free float review of the Adani Group securities,” it added. Changes for Adani securities associated with its MSCI Global Investable Market Indexes are due to be announced later on Thursday as part of its regular review for February.
MSCI defines the free float of a security as the proportion of shares outstanding that is considered available for purchase in public equity markets by international investors.
In response to the MSCI statement, Hindenburg founder Nathan Anderson wrote on Twitter: “We view this as validation of our findings”.
Some of Adani group shares had been rebounding this week but tumbled again today. Adani Enterprises sank 10.72 percent to close at Rs 1,927.30 apiece on BSE, while Adani Transmission, Adani Total Gas and Adani Power were each down 5 percent. Adani Ports and Special Economic Zone closed 2.90 percent lower at Rs 582.05.
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