MSCI Reviews Free Float Status Of Adani Stocks, Group Shares Tank

All 10 stocks of Adani Group faced a decline, with the leading company, Adani Enterprises Ltd, experiencing a significant drop of up to 15 per cent

The decline was prompted by MSCI’s announcement of a review regarding the number of Adani Group-linked shares that are readily available for trading on public markets.

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Index provider MSCI (Morgan Stanley Capital International) on Thursday said it was reviewing the free float status of Adani Group securities after market participants raised concerns about the eligibility of companies in the Indian conglomerate for some of its indexes, according to a report by Reuters.

MSCI in a statement said, "MSCI has received feedback from a range of market participants concerning the eligibility and free float determination of specific securities associated with Adani Group for the MSCI Global Investable Market Indexes (GIMI).”

MSCI said it defined the free float of a security as the proportion of shares outstanding available for purchase in the public equity markets by international investors. "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," the statement said. "This determination has triggered a free float review of the Adani Group securities."

Following the announcement by MSCI, shares of Adani Group companies began trading lower on Thursday, after a two-day recovery. The decline was prompted by MSCI’s announcement of a review regarding the number of Adani Group-linked shares that are readily available for trading on public markets.

All 10 stocks of Adani Group faced a decline, with the leading company, Adani Enterprises Ltd, experiencing a significant drop of up to 15 per cent. The decline followed a substantial increase of 35 per cent in the previous two days. The other group stocks that witnessed decline are — Adani Ports lost 7 per cent, Adani Power fell 5 per cent, Adani Transmission 5 per cent, Adani Total Gas Ltd 5 per cent, Adani Green Energy 5 per cent, ACC declined 3.7 per cent, Ambuja Cement 6.3per cent and NDTV 3.7 per cent.

Seven key Adani companies have lost at least a combined $110 billion in value after US based short seller Hindenburg Research alleged improper use of offshore tax havens and stock manipulation by the conglomerate.

Adani Group has rejected the criticism and denied any wrongdoing.

MSCI said the Adani review would be carried out as part of its regular February review. The results of that were due to be published later Thursday. The index provider said in late January it was seeking feedback from market participants as the sell-off crisis engulfed Adani.

Adani Group did not immediately respond to a Reuters request for comment.

In another setback, France’s oil major TotalEnergies said that a hydrogen project worth $50 billion with the Adani Group has been put on hold, reported PTI. However, the firm has added that its $3.1 billion investment in the gas and renewables units of Adani Group were healthy.