Stocks of Adani Group remain in MSCI indices after quarterly review

Stocks linked to the Adani Group have escaped removal from MSCI Inc. indexes, as the Indian conglomerate continues to deal with the impact of a short-seller campaign that wiped out almost half of its market value in just over two weeks.

It is still unclear whether the index provider has adjusted weightings of any of the group’s stocks in its equity gauges in its latest review. MSCI said Wednesday it was reviewing the amount of shares linked to the group that were freely tradable in public markets.

The review has directed market attention back to a key allegation by Hindenburg Research: that offshore shell companies and funds tied to the Adani Group comprise many of the largest “public,” or non-insider, holders of Adani shares.

Billionaire Gautam Adani’s companies have suffered a stock meltdown that at one point erased $117 billion in market value after Hindenburg accused the company of accounting fraud and market manipulation, allegations the group has furiously denied. Adani Enterprises, the flagship firm of the conglomerate, was forced to pull a key share sale in the 11th hour and shelve its first-ever public sale of bonds.

Adani Group has in recent days stepped up measures to reassure investors and banks by repaying loans and pledging to reduce debt ratios. The slump in the group’s dollar debt has attracted buyers such as Oaktree Capital Management and Davidson Kempner Capital Management.

The ramifications of the selloff are spreading far and wide as concerns grow about the exposure that financial institutions and investors have to Adani. The tumult has disrupted parliament and India’s main opposition party is ramping up pressure on Prime Minister Narendra Modi over his silence on the issue.

All Adani group entities, except for Adani Wilmar Ltd. and New Delhi Television Ltd., are part of MSCI’s key gauges for Asia Pacific, emerging markets and India, according to data compiled by Bloomberg.