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GQG sale of Adani Energy shares disrupts MSCI index rebalancing trade
Adani Energy shares fell 10% on 31 August after an unexpected block sale during India’s closing auction overwhelmed demand from passive index trackers, with about $569 million changing hands.
GQG Partners sold a large block of Adani Energy Solutions shares during India’s closing auction on 31 August, disrupting a trade several hedge funds had built ahead of an MSCI index reshuffle, according to a Bloomberg report cited by Hedgeweek. The selling pressure overwhelmed demand from passive investors, contributing to a 10% drop in Adani Energy shares, its sharpest one-day decline in roughly seven months. About $569 million worth of the stock traded in the session, after traders expected index changes to draw significant buying from funds that track the MSCI benchmarks. Hedge funds had positioned in anticipation that passive trackers would need to invest after the name was added to the MSCI Standard Index. Nuvama Alternative & Quantitative Research estimated those trackers would invest around $310 million in Adani Energy, and Adani Enterprises was expected to receive roughly $202 million of passive inflows tied to its increased index weighting. Bloomberg data cited by Hedgeweek showed a single entity sold about 21.92 million Adani Energy shares at 1,417 rupees apiece in the closing auction, though the seller was not identified by Bloomberg. An exchange filing published on Thursday said GQG held a 3.46% stake in Adani Energy as of 31 August, down from 5.1% in June 2023, and GQG declined to comment while the Adani Group did not respond to a request for comment. Hedgeweek also noted the MSCI rebalance was the first major index event under India’s new closing-auction mechanism, adding complexity for event-driven positioning.