The result of the evaluation will be declared on Friday at 4 am. Market experts estimate outflows could range from several million dollars to more than half a billion, depending on the amendments, which will become effective at the end of May.
The term ‘free float’ here refers to that part of the shares of a company which is accessible to international buyers. On 27 January, MSCI sought feedback from market participants in response to allegations made by US short-seller Hindenburg Research, which claimed that some Mauritius-based funds were used as parking entities for Adani shares . MSCI has since reviewed these issues.
“MSCI has determined that there is sufficient uncertainty in the characteristics of certain investors that they should no longer be designated as free float in accordance with our methodology. This determination has triggered a free float review of Adani Group’s securities. The pro forma results of the February index review, including these changes, are due to be announced this week on February 9, 2023,” the index provider said.
A query from Adani Group spokesperson remained unanswered till press time. The Adani Group has denied Hindenburg’s allegations, labeling them “maliciously mischievous”.
A fund manager, who requested anonymity, said MSCI has “set an example for local index managers to review the free float of Adani shares.”
The Hindenburg report alleging accounting fraud and stock price manipulation against the Indian conglomerate has nearly halved the value of shares of the 10 listed conglomerates and pushed founder Gautam Adani to the 18th spot on Forbes’ billionaires list. Had to come in eighth place instead. 24 January.
“Following our January 27, 2023 announcement about the Adani Group, MSCI received feedback from a range of market participants regarding the eligibility and free float determination of specific securities belonging to the Adani Group for inclusion in the MSCI Global Investable Market Index (GIMI) is,” added the index provider.
MSCI defines a security’s free flow as the proportion of shares outstanding that are considered available for purchase by international investors on public equity markets.
“A sharp cut in weightings will push the (group) stock further,” said Rajesh Palvia, vice-president (technical and derivatives), Axis Securities.
Asked how more cuts could impact the broader market, Nilesh Shah, MD, Kotak AMC, said, “In the short term, markets are voting machines, driven by sentiment and flow. In the long term, they are the ones weighing in.” are like machines, where the fundamentals come into play. Gravity works in real life as well as in the markets. Price and fundamentals cannot stay away from each other for long.”
According to market sources, Adani Enterprises (0.71%) has the highest weighting on the MSCI Standard Index with a holding value of $430 million, followed by Adani Total Gas (0.55% and $330 million), Adani Transmission (0.48% and $290 million) million) is ranked. ), Adani Ports (0.4% and $240 million), Adani Green (0.37% and $220 million) and Adani Power (0.18% and $100 million). This information could not be independently verified by Peppermint,
after adding 60,022 crore in market cap in two days from Wednesday, m-cap of Adani’s listed shares fell 58,596 crores from 9.83 trillion. Losses were led by Adani Enterprises (-10.7%) and Ambuja Cements (-7%).
catch all corporate news And updates on Live Mint. download mint news app to receive daily market update & Live business News,