Mumbai: MSCI has cut the amount of stocks it considers freely tradable in the public market for four Adani Group companies in its indexes, a move analysts say will result in lower weightings for them in MSCI’s indexes.
MSCI said in response to a Bloomberg query that shares held by certain Adani investors should no longer be designated as freely tradable in the public market and it will implement free float changes on Adani Enterprises, Adani Transmission, Adani Total Gas and ACC, effective February 28.
The weighting of Adani Enterprises will be reduced by 30 basis points to 0.5 per cent in the MSCI Global Standard Index, Nuvama Wealth Management analyst Abhilash Pagaria said in a note, based on his calculations. The weightings on the other three stocks will also come down, he said, adding the move would result in hundreds of millions of dollars in outflows from these stocks.
Stocks linked to the Adani Group, however, have escaped removal from MSCI indexes in its quarterly review, as the Indian conglomerate continues to deal with the impact of a short-seller campaign that wiped out almost half of its market value in just over two weeks.
The MSCI review has directed market attention back to a key allegation by Hindenburg Research: that offshore shell companies and funds tied to the Adani Group comprise many of the largest “public,” or non-insider, holders of Adani shares.
Billionaire Gautam Adani’s companies have suffered a stock meltdown that at one point erased $117 billion in market value after Hindenburg accused the company of accounting fraud and market manipulation, allegations the group has furiously denied. Adani Enterprises, the flagship firm of the conglomerate, was forced to pull a key share sale in the 11th hour and shelve its first-ever public sale of bonds.