Norway's sovereign wealth fund divests all stake in Adani Group

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Norway's sovereign wealth fund divests all stake in Adani Group

Norway's $1.35 trillion sovereign wealth fund has divested virtually all its remaining shares in companies belonging to the embattled Adani Group in recent weeks, according to its $1.35 trillion sovereign wealth fund.

At the end of 2022, the fund held stakes in Adani Total Gas, Adani Ports Special Economic Zone and Adani Green Energy. We have no exposure left to Adani companies. Christopher Wright, the fund's head of ESG risk monitoring, said since the end of 2022 we have reduced our exposure to Adani companies.

He said that he has watched Adani for many years on ESG issues, many on their handling of environmental risks.

Norway's sovereign wealth fund held a stake in Adani Total worth $83.6 million, a stake in Adani Ports worth $63.4 million and a stake in Adani Green Energy of $52.7 million at the end of 2022.

The central bank owns 1.3 per cent of all the globally listed shares with stakes in some 9,200 companies, as well as 1.3 per cent of all globally listed shares.

The CEO of Norway's $1.3 trillion oil fund said on January 31 that the world's largest sovereign wealth fund has been reducing stakes in Adani Group companies because of the complex situation that is attached to the ports-to-power conglomerate.

We have sold quite a number of Adani companies and we have reduced in some of them. We have very little exposure compared to what you would have expected us to have, Nicolai Tangen told the Financial Times.

Adani Group stocks have been facing a lot of volatility since US short seller Hindenburg Research's January 24 alleged improper use of offshore tax havens and concerns about high debt, but the subsequent market meltdown has resulted in a dramatic and sudden fall in group chairman Gautam Adani'sAdani's fortunes.

Tangen said that the oil fund had reduced its positions in Adani companies because of risks such as potential corruption, environmental damage and human rights abuses.

It is a complex situation. We have taken a lot of exposure out of this because we have a department that is looking at risk-based divestments. We started to look at this a long time ago. The oil fund, which usually owns 1.3 per cent of a stock, had holdings of 0.3 per cent in Adani Ports and Special Economic Zone, 0.17 per cent in Adani Total Gas and 0.14 per cent in Adani Green Energy at the end of 2022.

Financial index provider MSCI said on Thursday that some Adani securities should no longer be designated as a free float after market participants raised concerns about eligibility of the Indian conglomerate's companies for some of its indexes.

The US-based creator of widely-watched stock indexes, MSCI, said in a statement that it received feedback from a range of market participants regarding the eligibility and free float determination of specific securities.

MSCI has determined that the characteristics of certain investors have sufficient uncertainty that they should be no longer designated as free float. This determination has resulted in a free float review of the Adani Group securities, it added.

Changes for the Adani securities associated with its MSCI Global Investable Market Indexes are expected to be announced later on Thursday as part of its regular review for February.

MSCI defines the free float of a security as the percentage of shares outstanding that is considered available for purchase in public equity markets by international investors.

On Thursday after the MSCI announcement, Hindenburg founder Nathan Anderson wrote on Twitter: We view this as validation of our findings. Some Adani companies shares had rebounded this week but fell again on Thursday after the MSCI announcement. Adani Enterprises fell by 11.2 per cent after losing 20 per cent in early morning trade.

Adani Transmission, Adani Total Gas and Adani Power were each down 5 per cent, while Adani Ports and Special Economic Zone were down nearly 2.9 per cent.