Dow Jones decides to exclude Adani Enterprises from its sustainability indices

The Nifty50 stock Adani Enterprises has been removed from the Dow Jones Sustainability Indices as a result of allegations of fraud made against the Adani Group in the Hindenburg report. This has caused anxiety among investors.

“Adani Enterprises will be removed from the Dow Jones Sustainability Indices following a media and stakeholder analysis following allegations of accounting fraud,” Dow Jones said in a statement. “The allegations of accounting fraud triggered the media and stakeholder analysis.”

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It was stated that the modifications to the indices will take effect prior to the opening of the market on February 7th.

What is Dow Jones Sustainability Indices? 

The Dow Jones Sustainability Indices are float-adjusted market capitalization weighted indices that evaluate the results of firms listed with ESG (Environmental, Social, Governance, and Economic) criteria as identified by S&P Global through the Corporate Sustainability Assessment. These companies were chosen because of their commitment to improving environmental, social, governance, and economic conditions (CSA). It reflects the top 10% of the largest 2,500 firms in the S&P Global BMI based on long-term ESG criteria and includes companies such as Apple, Google, and Microsoft.

Since an American short-seller revealed various charges in its report one week ago, Adani stocks have been in a freefall, and as a result, over forty percent of investor capital has been erased as a direct result.

The National Stock Exchange (NSE) has implemented a short-term extra surveillance measure (ASM) framework, and it has applied it to Adani Enterprises, Adani Ports and Special Economic Zone, and Ambuja Cements. This decision was made with the intention of protecting investors from the sharp volatility that has been seen in the stocks of companies that are part of the Adani Group.

Securities and Exchange Board of India starts the investigation

It is rumoured that SEBI is investigating the drop in the share prices of companies belonging to the Adani Group in order to look into any possible anomalies in the FPO. The Reserve Bank of India (RBI) is said to have reportedly requested information from financial institutions regarding their exposure to companies belonging to the Adani Group, the majority of which are heavily leveraged.

Despite all of the challenges, which have never been seen before in the history of the Ahmedabad-based conglomerate that is involved in everything from ports and energy to fast-moving consumer goods (FMCG), Adani has maintained that the fundamentals of his enterprises are strong.

“Our assets are strong, and our balance sheet is in good shape. We have an outstanding track record of meeting our loan obligations, and our EBITDA levels and future revenues have been very good recently. We will keep our attention directed towards the creation of long-term value, and the management of growth will be handled by internal accruals “He claimed that after Adani Enterprises made the unexpected news last night that they were cancelling their FPO, which had received a full subscription.

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