MSCI (Morgan Stanley Capital International) has announced that it will review the status of Adani Group in its indices since it believed that certain investors in the group’s shares can no longer be designated as free float. MSCI said it will announce the changes later in the day.
“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),” said MSCI in its announcement.
MSCI defines free float as the proportion of shares outstanding available for purchase in the public equity markets by international investors. A reduction in weightages for Adani Group shares could lead to more sell-off from exchange-traded funds, and index funds benchmarked to MSCI will have to rejig their portfolios. Analysts say that free float concerns are largely in Adani Enterprises, Adani Green and Adani Total Gas.
MSCI-linked holding in Adani Group stocks stands at approximately ₹19,778 crore. According to analysts, the Adani Group stocks that are part of the MSCI India index include Adani Enterprises (1.30 per cent), valued at approximately ₹4,978.0 crore; Adani Total Gas (1.35 per cent) ₹3,199.0 crore; Adani Transmission ₹3,024 crore; Adani Ports ₹2,517 crore; Adani Green ₹2,087 crore; Ambuja Cement ₹1,824 crore; ACC ₹1,184 crore; and Adani Power valued at approximately ₹965 crore.
“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,” MSCI explained as the reason behind triggering a review of these securities.