Adani Energy Solutions Drops Over 9% as MSCI Excludes Stock Over Free Float Concerns

Adani Energy Solutions share price fell over 9% on November 7 after MSCI decided not to include the stock in its standard index during its November review. The company, formerly known as Adani Transmission, was expected to be added to the index, but MSCI cited concerns over the stock’s free float as the reason for its exclusion.

Impact on Stock and Market Expectations

By 10:40 AM on November 7, 2024, Adani Energy Solutions shares were down 9.13%, trading at ₹978 each. The company’s market capitalisation stands at ₹1.18 lakh crore. The final adjustments for the MSCI rebalance will take effect on November 25.

As part of the latest MSCI review, stocks like BSE, Voltas, Alkem Laboratories, Kalyan Jewellers, and Oberoi Realty were included in the Global Standard Index. This is expected to lead to about $2.5 billion in foreign institutional investor (FII) passive flows into India. Voltas is expected to attract the largest share of inflows, followed by BSE and other companies like Kalyan Jewellers and Alkem Laboratories.

Strong Financial Performance

On October 22, Adani Energy Solutions reported a strong profit of ₹773.4 crore for the September quarter, marking a 172% increase from the previous year. The company’s revenue also grew by 85% to ₹6,813.7 crore, while its EBITDA rose 31% to ₹1,891 crore.

The company highlighted that its total income saw strong growth due to several factors. These included contributions from newly operational transmission assets, partial completion of lines at ongoing projects, and higher energy sales driven by increased demand in its distribution businesses in Mumbai and Mundra. Additionally, the smart metering business played a role in its growth. 

The capital expenditure (Capex) for the first half of this financial year was ₹4,400 crore, compared to ₹2,622 crore in the same period last year.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.