shrinking of the log file does not affect index fragmentation, only data file shrinking does that.

Shrinking of the log file is usually bad as it then has to grow again to handle normal activity, which is a waste of resources.

However, shrinking of the log file as a one off operation to reduce the number of VLFs is not a bad thing. Shrink the log as much as you can (it will never shrink to less than 2 VLFs) then immediately grow it in sensible sized chunks to the size it actually needs to be.