Adani Group shares: Rs 1.4 lakh crore wiped out as MSCI rebalancing triggers sharp volatility

Shares of Adani Group companies came under heavy selling pressure on Monday, wiping out nearly Rs 1.4 lakh crore, or about $15 billion, in market capitalistion, according to a Bloomberg report. The correction in Adani Group stocks came as heightened activity during the Closing Auction Session (CAS) led to price swings amid the latest MSCI index rebalancing.

Adani Enterprises Ltd emerged as one of the biggest losers, plunging 9.8% — its steepest single-day fall since January. Adani Energy Solutions also dropped more than 10%, while all nine listed Adani Group companies ended the session in the red. Three of the group’s stocks recorded losses of more than 6% each.

The sharp moves intensified toward the end of the trading session as passive funds adjusted their portfolios to reflect changes in MSCI indexes. The rebalancing triggered significant buying and selling flows in several Adani counters, resulting in unusually high volatility during the closing auction.

The scale of the market-value erosion highlights the impact that large index-related trades can have on individual stocks, even when the overall flows linked to the MSCI changes are substantial, said the Bloomberg Report.

According to Nuvama Alternative & Quantitative Research, passive funds were expected to deploy around $310 million into Adani Energy Solutions following its inclusion in the MSCI Standard Index. Adani Enterprises and Adani Ports were estimated to attract about $202 million and $77 million, respectively.

Market analysts said the sharp decline in some Adani stocks, despite expectations of passive buying, could indicate that traders had positioned themselves ahead of the rebalancing and were subsequently forced to unwind those positions when the market moved against them.

“The sharp fall in the two Adani counters, despite passive buying, suggests that traders built positions that didn’t meet expectations, possibly leading to forced liquidation,” said Arun Kejriwal, founder of Kejriwal Research & Investment Services.

The selloff resulted in the Adani Group’s largest single-day fall in market value in nearly 21 months. The previous major fall came in November 2024, when US prosecutors charged Chairman Gautam Adani in connection with alleged bribery involving solar-energy contracts in India.

The group has since seen some relief on the legal front. In early August, Adani secured the dismissal of a US fraud probe, removing a significant legal overhang that had weighed on investor sentiment toward the conglomerate.

However, Monday’s sharp moves, reflect the continued exposure of Adani Group stocks to large institutional flows and index-related trading activity, particularly during the market’s closing auction.