Finally, MSCI announced that it has removed bans with regard to the treatment of Adani Group stocks last month when updating free float factors, including a number of other indicators, in the framework of the August 2024 Index Review. The changes also involve a decrease in weight, both for Adani Enterprises and Ambuja Cements, in the Standard Index.
There are some positive signs for investors who have invested in Adani Group stocks following the fresh Hindenburg report. Index provider MSCI has decided to ease restrictions on the treatment of Adani Group stocks, mainly on the free float.
The changes, like the NOS, FIF and DIF, are to be effected together with the August 2024 index review, the MSCI said in a statement released on the night of August 12.
In the last month of February 2023, MSCI suspended particular changes to any of the adjustments in the Adani Group securities because of its doubt regarding the free float status of some of the Adani stocks. In the past, when MSCI was taken to task on this issue, it explained that the fact that “the characteristic of some investors in Adani Group stocks create sufficient uncertainty” regarding their free float status was the reason for exclusion.
Therefore, MSCI put on hold ‘other possible changes to the number of shares for the affected securities’ and delayed action on a number of ‘non-neutral corporate events’ pending further consideration.
MCSI is returning to normal in relation to the securities of the Adani Group: The following is a statement from MSCI to their clients of various announcements after its earlier announcement to undertake a thorough review, including providing the investors with other data on some Indian companies including the Adani Group companies and then make some changes to the weightings of particular indices, today MSCI plans to make the following changes.
Those that were rescheduled earlier or in February 2023 would be implemented at the end of August 30, 2024, while the respective corporate events for these securities would start from September 2, 2024, MSCI said.
MSCI has also made it clear that the proforma FIF and DIF for the Adani Group securities would be announced with the August 2024 Index Review. This review, which was earlier planned to be done, had to be got delayed as MSCI went on waiting with attention towards number of issues including the one associated with the eligibility of the Adani Group securities and the other with the review of their free float.
Such changes could be applied to important Adani Group shares that include the MSCI Global Standard Index: Adani Ports, Adani Enterprises, Adani Green, Adani Power, and Ambuja Cements. In the process of review for this index, the firm has reduced the weight of Adani Enterprises and Ambuja Cements.
Even when it raised these measures, MSCI demanded that it would remain attentive towards Adani Group and also other related securities. The free float connects to the number of shares of a company’s equity that are available for trading by the public, and for its part, the company said it observes any alterations to the free float, and will give more information on the matter when necessary.
Earlier in the week, on Monday, August 12, 2013, all the Adani group shares had mixed outings, with some of them up slightly and some of them down, with a decrease of up to 4%. The group’s stocks were somewhat able to come back from the loss through the day after the company tem was affected by a new report from US short-seller Hindenburg.
The report accused Ms Madhabi Puri Buch, the chairperson of SEBI, of having not waged a thorough investigation into impropriety at the firms belonging to Adani groups because of a conflict of interest of investing in the very funds that were being used by the Adani executives to transfer money.
Market regulator SEBI, Madhabi Puri Buch, and her husband Dhaval Buch have ignored the allegations made by Hindenburg research, arguing that they have references that disprove all the allegations made in the report. SEBI has also maintained the position that the chairperson of the company made the disclosure at all relevant times.
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