Msci Postpones Weight Reduction Of Select Adani Group Companies To May

The two companies that were about to see a reduction in weightage were Adani Total Gas and Adani Transmission.

MSCI has cited potential replicability issues due to the impact from price limit mechanisms in the two stocks as the reason behind the delay.

Replicability issues stem from the fact that if stocks are locked in a circuit, they could not be sold.

Shares of Adani Transmission have been locked in a lower circuit of five percent for the last five trading sessions. On the other hand, Adani Total Gas has been on a losing spree for 17 straight sessions starting January 23, post which it has seen two lower circuits of 20 percent each, three of 10 percent each and has been under a five percent circuit limit since February 03.

For other Adani Group companies, MSCI has also cited potential replicability issues and ongoing uncertainty pertaining to key input data.

MSCI will now apply a special treatment for all Adani Group companies that are part of its equity indices starting from the current review.

However, there will be no changes in any Adani Group stocks in the non-market capitalisation weighted indexes and custom indexes.

MSCI Inc. last week said that it would review the eligibility of some Adani securities in its widely followed benchmark indexes.

Post this, the global index exclusively told CNBC-TV18 last week that post feedback received, there will be weight reduction in select Adani Group companies like Adani Enterprises, Adani Total Gas, Adani Transmission and ACC.

The changes were supposed to be made as of the close of February 28, 2023 and take effect on March 1.

Shares of various Adani Group companies have seen a massive sell-off since January 24 after a US short-seller Hindenburg Research accused the conglomerate of “brazen stock manipulation” and “accounting fraud.”