The scathing Hindenburg Research report has been showing its effect on billionaire Gautam Adani-led Adani Group companies in many ways. As per updates, one of ESG’s (environmental, social and governance) most influential gatekeepers will soon deliver its own judgement.
According to a Bloomberg report, MSCI Inc will soon be releasing the results of a quarterly review for its ESG and climate indexes this week. Since the Adani Group companies have pledged their companies to ESG principles and global frameworks, these results by MSCI become strategically important for the entities.
It must be noted that as per the report, MSCI has given Adani Green Energy Ltd a rating of A, which is its third-highest. The Adani unit is also included in many of its ESG and Climate indexes and hence, the MSCI rating results become important.
In addition to this, the report reads, “Passive ESG funds held over 97 lakh shares in Adani Green worth $81 million as of Monday, according to data compiled..The second-most popular Adani holding for ESG index funds is Adani Total Gas, with almost 12 lakh shares worth $17 million.
As far as the current ratings by MSCI go, they haven’t changed ever since the Hindenburg Research report alleged fraud and stock manipulation by the Adani Group, as per the report. Even though some global indices showered a negative impact on the group, MSCI, reportedly added that its indexes and ratings divisions operate independently.
Based on media reports, it must be understood that if MSCI reflects a significant downgrade in its ESG ratings of any of the Adani Group entities, they could be removed from the ESG indexes. This could also potentially result in another selling spree. Even before this, the Adani Group stocks witnessed massive selling soon after the Hindenburg report alleged fraud.