On Monday, Adani Total Gas and Adani Transmission shares are anticipated to experience a significant downturn in the wake of foreign institutional investors (FIIs) and foreign portfolio investors (FPIs) selling off their holdings. The reason behind this impending sell-off is MSCI’s decision to reduce the free float in these two Adani group stocks, according to stock market experts. Given that FIIs and FPIs who invest in index funds follow MSCI, they are expected to follow suit and decrease their exposure in these two Adani shares. Consequently, when the Indian stock market opens on Monday, a sharp sell-off by FPIs and FIIs is expected to occur, leading to a possible nosedive in the value of these two stocks.
The Adani group stocks, namely Adani Total Gas and Adani Transmission, are expected to experience a sharp sell-off on Monday, triggered by foreign institutional investors (FIIs) and foreign portfolio investors (FPIs) selling off their holdings. Following MSCI’s decision to lower the free float in these two Adani group stocks, market experts have forecasted this outcome.
According to Avinash Gorakshkar, Head of Research at Profitmart Securities, FPIs and FPIs who invest in index funds follow MSCI free float exposure. After the recent announcement from MSCI reducing the free float in Adani Total Gas and Adani Transmission from 25% to 14% and 10% respectively, these foreign investors are likely to divest their shareholding in those two Adani group companies soon. In spite of this though, Gorakshkar asserts that the impact on Adani Total Gas shares and Adani Transmission share price is restricted as they had already plunged drastically following Hindenburg Research’s query on the debt status of several entities part of the Adani group such as Adani Total Gas and Adani Transmission.
Anuj Gupta, Vice President – Research at IIFL Securities, has delved into the chart pattern of the two stocks from the Adani group. He forecasts that Adani Total Gas shares might see a correction in price as they have been struggling to breach ₹990 levels and failed to do so last week. If it does not manage to hold the ₹880 support mark, there might be a further decline towards ₹820 apiece level.
On the other hand, the technical chart of Adani Transmission shares is not looking positive, according to Gupta. Adani Transmission shares are currently facing resistance at ₹1100 apiece levels. The Adani share has support placed at ₹900 levels, and on breaching this support, Adani Transmission shares may go down towards ₹900 and ₹880 apiece levels. If the stock breaks its hurdle on the higher side, it may go up to ₹1200 and ₹1300 apiece levels.
In conclusion, the Adani group stocks are expected to experience a sharp sell-off on Monday due to the lower free float declared by MSCI. However, the downside in these stocks may be limited due to their previous heavy beating, and technical chart patterns suggest that there may be a correction in their prices.
