Why did Adani Green lose weight
New shares have been added to the MSCI India Index and this has reduced the weightage of Adani Green in the index. Experts say that compared to other companies, there is a possibility of huge volatility in the companies of Adani Group. Shares of the Adani Group companies had seen a spurt recently and they overtook Ambani to become the richest man in Asia and India. Abhilash Pagaria, Analyst at Edelweiss Alternative & Quantitative Research, said in a note last month that reducing the weightage of Adani Green in the MSCI India Index could result in investors withdrawing $220 million from the stock.
However, Adani Enterprises Ltd and Adani Ports and Special Economic Zone Ltd have been able to avoid this sell-off. Some of the Adani Group stocks like Adani Green, Adani Total Gas and Adani Enterprises do not have analyst coverage and are highly valued. Due to this many times the correct picture does not come in front of the investors.
share of foreign funds
Bloomberg Intelligence strategist Nitin Chanduka said that some foreign funds have significant stake in the shares of Adani Group. This too is a risk in itself. He said that if majority of the shares are held by a few people then its public float will be affected. Due to this there will be possibility of uneven volatility in the shares. Experts also say that it is difficult to get information about the shares of Adani Group as many stocks do not have analyst coverage. Comparing with the companies in the sector, there is a vast difference in valuation.
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