In potentially good news for Adani Group investors caught in the wake of the fresh Hindenburg report, index provider MSCI has announced the lifting of restrictions on the treatment of Adani Group stocks, particularly regarding their free float status.
The updates, which include changes to the Number of Shares (NOS), Foreign Inclusion Factor (FIF), and Domestic Inclusion Factor (DIF), will be implemented as part of the August 2024 Index Review, MSCI said in a statement late on 12 August.
Earlier, in February 2023, MSCI halted certain adjustments to Adani Group securities due to concerns about the free float status of these stocks. At the time, MSCI said that the “characteristics of certain investors in Adani Group stocks created sufficient uncertainty” to exclude them from being considered as part of the free float. As a result, MSCI suspended ‘potential changes to the number of shares for the affected securities’ and deferred the implementation of ‘non-neutral corporate events’, subject to review.
Also read | MSCI to raise HDFC Bank’s Global Standard index weight in two tranches
With the latest announcement, MSCI is resuming normal operations regarding Adani Group securities. The changes that were delayed earlier or postponed in February 2023, will now be implemented as of the close of August 30, 2024, with the regular implementation of corporate events for these securities beginning on September 2, 2024, said MSCI.
MSCI has also clarified that the proforma FIF and DIF for the Adani Group securities are announced along with the August 2024 Index Review. This review, originally scheduled for earlier, had been postponed as MSCI continued to monitor the situation, particularly concerning the eligibility of Adani Group securities and the estimation of their free float.
These updates could affect key Adani Group stocks that are part of the MSCI Global Standard Index -- Adani Enterprises, Adani Ports, Adani Green, Adani Power, and Ambuja Cements. As part of the latest review, MSCI has reduced the weightage of Adani Enterprises and Ambuja Cements in its Standard Index.
Despite lifting these restrictions, MSCI emphasised that it will continue to closely monitor Adani Group and associated securities. The company noted that it remains vigilant about any developments related to the free float and will issue further communication if necessary.
Earlier, on Monday, 12 August, Adani Group stocks ended the day mixed, with a few closing with mild gains, while others losing up to 4 percent. The group’s stocks partially recovered losses through the day, after being hit by a fresh report by US short-seller Hindenburg. The report alleged that SEBI chairperson Madhabi Puri Buch may not have conducted a proper investigation into impropriety at Adani group firms because of a potential conflict of interest from having invested in the same funds that were used by the Adani executives for moving money.
Market regulator SEBI, and Madhabi Puri Buch and her husband Dhaval Buch have denied the allegations, releasing detailed rebuttals to the claims made in the Hindenburg report. SEBI has also confirmed that the chairperson had made proper disclosures at all times.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
