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Shares of Adani Total Gas and Adani Transmission fell four per cent and three per cent to Rs 818 and Rs 885 after MSCI removed both the stocks from MSCI India Standard Index on Friday.
Indus Towers, which was also removed from the index, dropped two per cent to Rs 148.
Sonam Srivastava, Founder of Wright Research, an investment advisory firm said the removal from the indices means that these stocks will no longer be included in the portfolios of funds tracking the MSCI indices, leading to potential selling pressure.
The low free float of these Adani Group companies and sharp fall in share prices have resulted in the stocks ability to meet the market capitalisation requirements for inclusion in the MSCI Global Investable Market Indexes, he added.
The exclusion may also have a negative spillover effect on other Adani Group stocks, as the MSCI indices are closely followed by international investors, he said.
MSCI added Max Health, Sona BLW and HAL to the index which is widely tracked by foreign exchange traded funds and index funds.
Some of the stocks which have seen an increase in weightage in the index include Kotak Mahindra Bank, ONGC, Maruti Suzuki, NTPC, Mahindra & Mahindra, Yes Bank, Siemens, Interglobe Aviation, Ultratech Cement, and Zomato
Other companies that have lost weightage in the index include Reliance Industries, Infosys, ICICI Bank, JSW Steel, HDFC and Tata Consultancy Services.
Among small cap companies, ACE, Anupam Rasayan, Bikaji Foods, Fusion Micro, Gland Pharma, Ircon, Kaynes, Kfin and Maharashtra Seamless have been added to the Small Cap index.
This The apart, the newly spun-off NMDC Steel, Syrma SGS, Ujjivan SFB, Power Mech and RVNL have also been added to the Small Cap index.
Some of the stocks that have been excluded from small cap index are were Abbott, Astec, Dhani, Dilip Buildcon, Gillette, PCJ, Thyrocare and Vakranger.
Manish Chowdhury Head of Research Stoxbox said market sentiment towards Adani stocks has definitely soured after the Group saga started in January. The MSCI exclusion will put further pressure on these stocks with outflow of $200 million from these stocks.
“We are more comfortable with stocks that were added to the MSCI index due to their strong business fundamentals and a good headroom for growth in future and should aid foreign fund flows going forward,” he said.
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MSCI has revised the constituents of its India-based index on Friday. It has added Max Health, Sona BLW, HAL to MSCI India Standard Index while excluding Indus Towers, Adani Trans and Adani Total.
Some of the stocks which have seen an increase in weightage in the index include Kotak Bank, IndiGo and Zomato.
Among small cap companies, ACE, Anupam Rasayan, Bikaji Foods, Fusion Micro, Gland Pharma, Ircon, Kaynes, Kfin and Mah Seamless have been added to the Small Cap index.
This apart, the newly spun-off NMDC Steel, Syrma SGS, Ujjivan SFB, Power Mech and RVNL have also been added to the Small Cap index.
Some of the stocks that have been excluded from small cap index are Abbott, Astec, Dhani, Dilip Buildcon, Gillette, PCJ, Thyrocare and Vakranger.
Inclusion of stocks in the index will see higher foreign fund inflows and a possibility of appreciation in stock prices.
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