Why are some of the Adani group stocks taking a hit in the market?

A host of the Adani group stocks have taken a hit in recent days as investors adjusted holdings to reflect changes in the composition of the MSCI India index. This is more due to adjustments by the passive funds and ETFs for whom the weightage of some of the Adani stocks have gone down due to inclusion of fresh stocks. Also most of the Adani stocks have a very low free float in the market.

The impact was felt by stocks like Adani Green Energy, Adani Total Gas, Adani Transmission and Adani Power. All of them fell on this MSCI portfolio rejig. Adani group stocks have also been in the limelight for their high valuations and pace of wealth creation and many have expressed valuation concerns here. However, these adjustments are routine.