No More Free Float Status For Adani Securities On MSCI, Hindenburg Founder Says ‘Validation Of Our Findings’


FEBRUARY 9, 2023

New Delhi: After receiving feedback from “a range of market participants”, index provider MSCI has decided that some Adani Group securities should no longer be designated as free float market participants. It added that the changes for Adani Group securities and associated market capitalisation determinations are due to be announced on Thursday as part of its regular review for February.

“MSCI has determined that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float pursuant to our methodology,” said MSCI.

According to MSCI, the free float of security is defined as the proportion of shares outstanding that is considered available for purchase in the public equity markets by international investors.

MSCI in its statement also added that as part of its February Index Review, it will suspend “any potential changes to the Number of Shares (NOS) for the affected securities.”

“Further, until otherwise announced, MSCI will review the treatment of non-neutral corporate events for the affected securities on a case-by-case basis and potentially defer their implementation. The treatment of any such non-neutral corporate event would be announced to all clients with advance notice through regular Index announcements. For the avoidance of doubt, MSCI will continue implementing any neutral corporate events including ones requiring application of a Price Adjustment Factor,” it added.

“We view this as validation of our findings on offshore stock parking by Adani,” said Hindenburg Research founder Nate Anderson after MSCI released its statement.

Even though Adani Group share prices went up in the last few days, the conglomerate hasn’t yet recovered from the impact created by Hindenburg Research through its report published on 24 January 2023. The allegations of accounting and financial fraud by Hindenburg against the Adani Group unleashed an over USD 100 billion rout across Adani’s companies.