Index provider MSCI announced on Friday that it would lower the free float percentages of two Adani Group companies, Adani Total Gas and Adani Transmission, in its upcoming May index review.
MSCI now assesses Adani Total Gas' free float at 14 per cent, down from 25 per cent, and Adani Transmission's free float at 10 per cent, also down from 25 per cent. It is worth noting that free float represents the proportion of outstanding shares available for purchase in public equity markets by international investors.
MSCI is a provider of investment decision support tools, offering a wide range of products and services, such as market indexes, analytics, and ESG research for foreign investors. The company's indexes serve as benchmarks for various investment products and strategies worldwide.
The decision to mark down the free float of two Adani companies follows MSCI's February announcement to postpone the implementation of these updates, initially due in March. The index provider cited "potential replicability issues" as the reason for the delay, explaining that its methodology calls for indexes to be replicated "in an actual portfolio in a cost-efficient manner."
Additionally, MSCI stated in February that it would review the free float designation of some Adani firms' securities following accusations by U.S. short seller Hindenburg Research.
The Adani-Hindenburg row began when Hindenburg Research released a report in January, just days before Adani Enterprises’ FPO, accusing the ports to power conglomerate of using complex offshore structures to siphon off billions of dollars from its Indian operations. The company denied all these allegations made by the activist short seller.
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