MSCI cuts 4 Adani group companies' free-float designations
1 min read 10 Feb 2023, 07:17 AM ISTMSCI said in a statement it has reduced the free floats of Adani Enterprises, Adani Total Gas, Adani Transmission and ACC
PremiumIndex provider MSCI said it has cut the free-float designations of four securities of India's Adani group, a move which analysts have warned could impact their index weightings, as reported by Reuters.
MSCI said that it has reduced the free floats of Adani Enterprises, Adani Total Gas, Adani Transmission and ACC. The remaining companies' free floats will remain the same. MSCI defines free float as a proportion of shares outstanding that are available to investors for purchase in the public equity markets.
The four companies for which the free float designation change was announced had a combined 0.4% weighting in the MSCI emerging markets index as of January 30, as per Reuters' report. The changes come into effect on March 1.
Though, stocks linked to the Adani Group have escaped removal from MSCI Inc. indexes. The index provider had said on Wednesday that it was reviewing the amount of shares linked to the group that were freely tradable in public markets after determining that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float pursuant to its methodology.
"MSCI has received feedback from a range of market participants concerning the eligibility and free float determination of specific securities associated with the Adani Group for the MSCI Global Investable Market Indexes (GIMI)," it had said in a statement.
MSCI had said last month that it has sought feedback from market participants on Adani Group’s situation and is closely monitoring any information that would prevent the conglomerate’s securities from being eligible for its gauges.
Adani Group has seen about $100 billion wiped off the value of seven firms since the US based short seller Hindenburg Research alleged that a web of Adani-family controlled offshore shell entities in tax havens were used to facilitate corruption, money laundering and taxpayer theft. The conglomerate has called the report baseless and threatened legal action. Chairman Gautam Adani last week said that the group’s balance sheet is healthy.
Adani Group has in recent days stepped up measures to reassure investors and banks by repaying loans and pledging to reduce debt ratios. The slump in the group’s dollar debt has attracted buyers such as Oaktree Capital Management and Davidson Kempner Capital Management.
