MSCI probes free-float, Adani sell-off resumes

Free float is defined as the proportion of outstanding shares considered available for purchase in public equity markets by international investors.

Even as the Sensex gained 142 points, or 0.23 per cent, to end at 60,806.22, Adani Enterprises plummeted by 10.72 per cent. Adani Power, Adani Green Energy, Adani Total Gas and Adani Transmission plunged by five per cent each, Ambuja Cement by 6.86 per cent and Adani Ports by 2.90 per cent.  Adani Wilmar, however, gained 5 per cent.

Analysts say a change in free float status could affect the weightings of MSCI index constituents, possibly triggering a shift of positions by funds as many investments globally are aligned to such indexes.

“Some investors follow MSCI index as a gauge,” said Neeraj Dewan, director at Quantum Securities. “Depending on the outcome of the MSCI review, we could see more pressure on select Adani group stocks.”

“MSCI has determined that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float,” US-based MSCI said in a statement.

Free float is defined as the proportion of outstanding shares considered available for purchase in public equity markets by international investors.

Hindenburg Research founder Nathan Anderson tweeted: “We view this as validation of our findings.”