Adani fiasco brings down India's weight in the MSCI emerging markets index

The brutal selloff induced by the report has not only had an impact on Gautam Adani's personal wealth but also reduced India's weighting in MSCI's emerging-market benchmark

India's weightage in MSCI's emerging-market benchmark has dropped after the brutal sell-off in Adani Group's stocks. India has been replaced in the second spot by Taiwan after a rally in the latter's market. 

As of the end of January, Taiwan's weighting in the MSCI Emerging Markets Index rose to 14.2 per cent, behind leader China's 31.2 per cent, while India's fell to the third spot with 13 per cent, according to Bloomberg-compiled data.

The role reversal between India and Taiwan highlights the contagion of a stock meltdown that has wiped out $112 billion of market value in Gautam Adani's indebted conglomerate since US-based Hindenburg Research made allegations against the billionaire's business empire. While the MSCI India Index has lost 4.2 per cent this year, its Taiwan counterpart has surged about 11 per cent as part of a broader North Asian rally induced by China's reopening optimism, Bloomberg has reported. 

So far, 2023 has been a year of ups and downs for Indian industrialist Gautam Adani. He has famously been in the news for being India's wealthiest man for a while. He appeared amongst the world's top billionaires, briefly clinching the second spot in the acclaimed Bloomberg's list of the ultra-rich. However, February has not been kind to him.

While he started 2023 as the world's second wealthiest, he has now seen his fortunes fall. He sits at the 21st spot in the Bloomberg Billionaires Index. Adani has been facing the heat after the US-based short-seller Hindenburg Research released its consequential report, which induced a major sell-off in his group stocks.

The report managed to disrupt the Adani Enterprises' historic FPO worth Rs 20,000 crore, which was called off by Gautam Adani, apparently to save investors from the "potential risk" the group's stocks may exhibit in the times to come. The sell-off continues with no end in sight.