A day after American short-seller Hindenburg levelled sharp allegations against market regulator SEBI’s Chairperson, Madhabi Puri Buch, and the Adani group, global index manager MSCI has lifted its restrictions on the treatment of Adani Group stocks, particularly their free float status.
MSCI said in a statement late on Monday that it will consider changes to the number of shares, foreign inclusion factor, and domestic inclusion factor in its August Index Review.
Last February, MSCI had halted certain adjustments to Adani Group securities due to concerns over the free-float status of these stocks.
At the time, MSCI had said that the “characteristics of certain investors in Adani Group stocks created sufficient uncertainty” to exclude them from the free float.
MSCI suspended ‘potential changes to the number of shares for the affected securities’ and deferred the implementation of ‘non-neutral corporate events’, subject to review.
In its latest announcement, MSCI said it is resuming normal operations for Adani Group securities and they will be implemented on August 30.
In the latest review, MSCI has reduced the weightage of Adani Enterprises and Ambuja Cements in its Standard Index.
While lifting the restrictions, MSCI emphasised that it will continue to closely monitor Adani Group and associated securities.
Abhilash Pagaria, Head, Nuvama Alternative and Quantitative Research, said that with all the adjustments in the emerging market pack, India’s tentative weight will remain close to 20 per cent and should lead to net FII passive flow of about $3 billion.
The index could see seven inclusions and one exclusion. The reduction in Adani Enterprises and Ambuja Cements should result in a net outflow of $72 million and $74 million, respectively, he said.