The Toxic Bonds initiative sent a letter today to four index providers that are members of the Net Zero Service Providers Alliance – MSCI, S&P Dow Jones Indices, Bloomberg Index Services Limited and Morningstar Indexes – calling on them to remove all Adani Group bonds from their mainstream indices.
Hindenburg’s claims of Adani’s “brazen stock manipulation and accounting fraud” has been immediately followed by bond and stock values plummeting and a cancellation of Adani Enterprises US$2.5 billion share issuance. In response, trust in the Adani Group from banks and investors has been hugely eroded according to multiple analysts in the media. The S&P Dow Jones has now removed Adani Enterprises from their sustainability indices, and the pressure is building on Adani to pre-pay debts and find a way out of the mess. MSCI has also announced that it will cut the weightings of four companies in the Adani Group, however it has delayed two of these cuts. FTSE Russell is also reviewing index changes for Adani Group stocks.
The interconnected financial nature of the Adani Group makes it clear that indices with any company in the Adani Group, including Adani Green, are by extension supporting Adani’s mining businesses. The letter sent by The Toxic Bondsn network highlights that recent events undermine any confidence in the idea that proceeds from Adani Green’s planned issuance would be adequately ring-fenced. The Toxic Bonds initiative is calling for a response from indices by 2 March.