Adani Group stocks fall after 2 days of gains as MSCI to implement free float review
1 min read . Updated: 09 Feb 2023, 07:56 AM IST
Premium- MSCI has determined that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float pursuant to our methodology
Index provider MSCI said on Thursday that it was reviewing the free float status of Adani Group securities after market participants raised concerns about the eligibility of companies in the Gautam Adani-led Indian Group for some of its indexes.
Adani Group’s shares, which rebounded this week, fell in opening deals today with flagship Adani Enterprises dropping as much as 15% while Adani Ports fell over 5% on the BSE as MSCI said it was reviewing the amount of Adani Group-linked shares freely tradable in public markets. The group’s market value has plunged over the past two weeks after US short-seller Hindenburg Research published a critical report, with losses of as much as $117 billion.
"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 said in a statement.
The index provider released quarterly review of its gauges on February 9. 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.
“MSCI has determined that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float pursuant to our methodology. This determination has triggered a free float review of the Adani Group securities," it said. MSCI defines fress float as a proportion of shares outstanding that are available to investors for purchase in the public equity markets.
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, on Monday, said the promoters will pre-pay $1,114 million for the release of pledged shares of its firms ahead of the maturity in September 2024. These shares belong to Adani Ports & Special Economic Zones, Adani Green Energy and Adani Transmission.
