INSUBCONTINENT EXCLUSIVE:
Passive funds may have to buy shares worth about $830 million in the three companies post inclusionBillionaire Gautam Adani is likely to see
three more companies from his coal mining-to-data centers conglomerate join the MSCI India Index after shares in each one of them more than
doubled this year, according to analysts
The group's flagship Adani Enterprises, gas supplier Adani Total Gas and power distributor Adani Transmission may get included in MSCI's
country benchmark after the index provider's semi-annual review of its gauges in May, according to broker Edelweiss Financial Services and
independent research provider Smartkarma
Adani Green Energy and Adani Ports - Special Economic Zone are already there.The potential inclusions are seen further boosting wealth for
Mr Adani, who has added $20.2 billion to his net worth this year, the second-biggest increase among the world's billionaires
The tycoon -- who started out as a commodities trader in the late 1980s -- has diversified from mines, ports and power plants into airports,
The rally in stocks shows investors have rewarded his strategy of interlocking his group's interests with the Indian government's
infrastructure program.There is "very high probability of these Adani names to come in the index primarily due to the surge in their market
capitalization," Brian Freitas, a New Zealand-based analyst at Smartkarma, said by phone
"ETFs and other passive funds will have to buy, adding to Adani's fortune."Passive funds may have to buy shares worth about $830 million in
total in the three companies after their inclusion, according to calculations by Mr Freitas
Still, these stocks "trade much much higher than their global peers and longer-term returns may not be worth the risks involved," he wrote
in a note Wednesday.Meanwhile, S-P Dow Jones Indices said in a statement Monday that it will remove Adani Ports and Special Economic Zone
from the Dow Jones Sustainability Indexes because of links to Myanmar military.A lack of analyst coverage for many of the Adani group's
companies hasn't deterred MSCI from adding their stocks as the index provider's focus is more on other factors such as market value
Adani Green, which was added to the MSCI India gauge end-November, still has no analysts covering it, according to data compiled by
Bloomberg.Mr Freitas also sees the possibility of Adani Green being included in the NSE Nifty 50 Index, the National Stock Exchange of
India's benchmark gauge, once the bourse allows derivative contracts on the stock.Adani group shares traded mixed amid a broad decline in
Indian equities on Thursday
Adani Transmission jumped 5 per cent, Adani Total Gas climbed 2.3 per cent while Adani Ports rose 0.2 per cent as of 10:28 a.m
Adani Enterprises and Adani Green fell about 1.2 per cent each.MSCI is set to declare the results of its latest review on May 11 and changes
will be effective from close of trading on May 28, according to an announcement by the index provider in February."We do not comment on
market speculation on index changes," a spokeswoman for MSCI wrote in an emailed response.(Except for the headline, this story has not been
edited by TheIndianSubcontinent staff and is published from a syndicated feed.)
