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By Tanvi Mehta, Scott Murdoch and Rodrigo Campos

NEW DELHI/SYDNEY/NEW YORK (Reuters) - Moody's (NYSE:MCO) downgraded on Friday the ratings outlook for some Adani Group companies, while MSCI said it would cut the weightings of some in its stock indexes, the latest blows for the Indian conglomerate plunged into crisis by a short-seller's report.

New York-based short-seller Hindenburg Research accused the Adani Group in a Jan. 24 report of stock manipulation and improper use of offshore tax havens that it said obscured the extent of Adani family stock ownership in group firms.

The conglomerate, which has denied any wrongdoing, has since seen $110 billion wiped off the value of its seven listed firms.

The crisis has put the spotlight on 60-year-old billionaire founder Gautam Adani, who was forced to shelve a $2.5 billion stock offering amid the market meltdown.

It has also sparked worries of financial contagion in India and protests in parliament where lawmakers have demanded an investigation.

High-frequency data from the Institute of International Finance showed equity outflows in India pile up to $2.6 billion since the Hindenburg allegations through Thursday, more than half of the $4.27 billion outflow so far this year.

On Friday, Moody's downgraded its ratings outlook to negative from stable for Adani Green Energy; the Adani Green Energy Restricted Group, which represents some of its other units; and two subsidiaries of Adani Transmission.

"These rating actions follow the significant and rapid decline in the market equity values of the Adani Group companies following the recent release of a report from a short-seller highlighting governance concerns in the group," Moody's said.

MSCI reassessed the size of some Adani companies' free floats, having determined there was "sufficient uncertainty" surrounding some investors in Adani companies. It embarked on the review after feedback from market participants.

The index provider's action could lower India's weight in MSCI's Asia or Emerging Markets indexes by 20 basis points to 30 basis points, which could result in $1.7 billion of outflows by tracker funds, Goldman Sachs (NYSE:GS) analysts said in a note.

In another index action, the S&P BSE IPO index will drop Adani Wilmar, the conglomerate's consumer goods company, as part of its monthly review, according to a statement from S&P and the Bombay Stock Exchange, which did not explain the rationale behind the move.

Shares in the flagship Adani Enterprises closed down 4% on Friday after dropping 11% the previous day, when MSCI flagged the changes. Adani Transmission and Adani Total Gas slid 5% on Friday, while ACC lost 2%.

GRAPHIC: Adani Enterprises’ shares plunge after Hindenburg report - https://www.reuters.com/graphics/ADANI-INDIA/gdpzqdamwvw/chart.png

Also on Friday, India's Supreme Court heard petitions raising concerns about steep investor losses sparked by Hindenburg report's, and said investors needed to be protected.

"The point of concern here is how (to) ... protect the interest of investors," Chief Justice of India, D Y Chandrachud, said.

The stock market "is also a place where investment is made by a wide spectrum of middle class," he added, asking market regulator SEBI to submit the existing regulatory frameworks to the court and explain how investor interests can be safeguarded in future.

The court's remarks come as regulatory scrutiny is increasing on the Adani Group.

Reuters reported on Friday, citing sources, that SEBI is investigating Adani Group's links to some of the investors in the conglomerate's aborted $2.5 billion share sale.

MSCI said that, in addition to the group's flagship firm Adani Enterprises, it planned to cut index weightings for Adani Total Gas - a venture with France's TotalEnergies - and Adani Transmission, a power transmission company.

It will also reduce the weighting of ACC, a major Indian cement company acquired from Switzerland's Holcim (SIX:HOLN) last year but which is not one of the Adani group's main seven listed firms. The four companies had a combined weighting of 0.4% in the MSCI emerging markets index as of Jan. 30.

"The lower free float will require passive investors to sell stock to reduce their tracking error with the index," said Brian Freitas, a Periscope Analytics analyst who publishes on Smartkarma.

He estimated there would be around $570 million to sell by passive funds across Adani Enterprises, Adani Total Gas and Adani Transmission on Feb. 28.

The changes on MSCI indexes take effect on March 1.

Hindenburg founder Nathan Anderson has said MSCI's review was "validation of our findings". Adani Group did not respond to a request for comment from Reuters on Friday.