Image Source: Twitter
According to Reuters, index provider MSCI has reduced the free-float classifications of four shares from India’s Adani Group, a move that experts have warned might harm their index weightings.
MSCI stated that it has lowered Adani Enterprises, Adani Total Gas, Adani Transmission, and ACC’s free floats. The free floats of the remaining firms will remain unchanged. MSCI defines free float as the proportion of outstanding shares that are available for purchase in public equity markets.
According to Reuters, the four businesses for which the free float categorization change was disclosed had a combined 0.4% weighting in the MSCI emerging markets index as of January 30. The modifications take effect on March 1.
Stocks tied to the Adani Group, meanwhile, have not been removed from MSCI Inc. indices. On Wednesday, the index provider stated that it was reviewing the number of shares linked to the group that were freely tradable in public markets after determining that the characteristics of certain investors were uncertain enough that they should no longer be designated as free float under 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 stated last month that it has solicited comments from market players on Adani Group’s position and is actively monitoring any information that may exclude the conglomerate’s stocks from inclusion in its indexes.
Since the US-based short seller Hindenburg Research claimed that a web of Adani family-oowned offshore shell organisations in tax havens were used to facilitate corruption, money laundering, and taxpayer fraud, the worth of seven Adani Group companies has been reduced by roughly $100 billion. The company has dismissed the report and threatened legal action. Chairman Gautam Adani stated last week that the group’s balance sheet is in good shape.
Adani Group has recently increased its efforts to reassure investors and banks by repaying loans and promising to lower debt ratios. The group’s dollar debt has fallen in value, attracting purchasers such as Oaktree Capital Management and Davidson Kempner Capital Management.
