With global index aggregator MSCI reducing weighting on four stocks of Adani Group, it sees a potential outflow of $428 million, Nuwama Alternate & Quantitative Research suggested in a note. Nuwama estimates that CG Power and Bank of Baroda, which have been added to the MSCI Global Standard index, could see inflows of $161 million and $145 million, respectively. According to Nuwama, Biocon, which has been ousted, could see an outflow of $68 million.
Shares of Adani Enterprises were trading at Rs 1,900, down 1.42 per cent. Adani Transmission touched its lower circuit limit at Rs 1,186.15. Annie Total Gas Tanked fell 5 per cent to Rs 1,258.25. ACC was quoting at Rs 1,890.35, down 1.36 per cent. At the same time, shares of Bank of Baroda and CG Power rose up to 3.4 per cent. Biocon closed 1.01 per cent down at Rs 240.70.
MSCI reduced free-float designations for four Adani shares, but did not remove any shares. The four stocks had a weightage of 0.4 per cent in the MSCI Emerging Markets Index as of January 30. MSCI defines a security’s free float as the proportion of outstanding shares that are considered available for purchase by international investors on public equity markets. MSCI said the free float for the remaining Adani group companies in the MSCI indices will remain the same. The changes have come into effect from March 1.
Nathan Anderson, founder of Hindenburg Research, had said on Thursday that MSCI’s statement on Adani corroborates Hindenburg’s findings on offshore stock parking by the Adani group. MSCI said it has determined that there is sufficient uncertainty in the characteristics of certain Adani investors that they should no longer be designated as free float in accordance with our methodology.
MSCI had earlier stated that it has received feedback from several market participants regarding the eligibility and free float determination of specific securities belonging to the Adani Group for the MSCI Global Investable Market Index.
“This determination has triggered a free float review of the securities of the Adani Group. MSCI will apply the resulting free float changes and associated market capitalization determinations in connection with the February 2023 index review using data from the cut-off dates described in section 3.1.” 9 of the GIMI method,” it said.