NEW DELHI: Index provider MSCI Inc has postponed the implementation of reducing the weightages of two Adani group firms, Adani Total Gas and Adani Transmission, in its indices, citing potential impact from price limit mechanisms.
The decision on the changes in the weightages, which was to be effective this month, has now been postponed to May.
In a statement, MSCI said the reversal of the updates to these two securities in the February 2023 index review will be reflected in the MSCI Index Product files starting from February 16.
The global index provider cited potential replicability issues due to impact from price limit mechanisms in two Adani group firms as the main reason behind the delay.
In light of potential replicability issues due to impact from price limit mechanisms specific securities associated with the Adani Group, MSCI will postpone the implementation of such previously announced updates to the Foreign Inclusion Factors (FIFs) for — Adani Total Gas and Adani Transmission — to the May 2023 index review, it said in the statement on Thursday.
For the last six trading sessions, shares of Adani Transmission and Adani Total Gas had touched their respective lower circuit levels.
According to MSCI, there is also potential replicability issues as well as ongoing uncertainty with relation to key input data related to other Adani Group companies.
It will also apply a special treatment for all Adani Group’s associated securities in the MSCI Equity Indexes starting from February, the statement said.
However, there will be no changes in any Adani Group stocks in non-market capitalisation weighted indexes and custom indexes will resume at the May 2023 Index Review.
Further, MSCI said it will continue to monitor information that may impact the eligibility of the relevant securities for the MSCI Global Investable Market Indexes or estimates of their free float.
MSCI defines the free-float of a security as the proportion of shares outstanding that is considered available for purchase in the public equity markets by international investors.
Adani Group’s stocks have taken a beating on the bourses since January 24, when the US-based activist short-seller Hindenburg Research through its adverse report made a litany of allegations, including fraudulent transactions and share price manipulation at the group.
The decision on the changes in the weightages, which was to be effective this month, has now been postponed to May.
In a statement, MSCI said the reversal of the updates to these two securities in the February 2023 index review will be reflected in the MSCI Index Product files starting from February 16.
The global index provider cited potential replicability issues due to impact from price limit mechanisms in two Adani group firms as the main reason behind the delay.
In light of potential replicability issues due to impact from price limit mechanisms specific securities associated with the Adani Group, MSCI will postpone the implementation of such previously announced updates to the Foreign Inclusion Factors (FIFs) for — Adani Total Gas and Adani Transmission — to the May 2023 index review, it said in the statement on Thursday.
For the last six trading sessions, shares of Adani Transmission and Adani Total Gas had touched their respective lower circuit levels.
According to MSCI, there is also potential replicability issues as well as ongoing uncertainty with relation to key input data related to other Adani Group companies.
It will also apply a special treatment for all Adani Group’s associated securities in the MSCI Equity Indexes starting from February, the statement said.
However, there will be no changes in any Adani Group stocks in non-market capitalisation weighted indexes and custom indexes will resume at the May 2023 Index Review.
Further, MSCI said it will continue to monitor information that may impact the eligibility of the relevant securities for the MSCI Global Investable Market Indexes or estimates of their free float.
MSCI defines the free-float of a security as the proportion of shares outstanding that is considered available for purchase in the public equity markets by international investors.
Adani Group’s stocks have taken a beating on the bourses since January 24, when the US-based activist short-seller Hindenburg Research through its adverse report made a litany of allegations, including fraudulent transactions and share price manipulation at the group.
