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MSCI delays weighting cuts for two Adani companies, cites 'replicability' concerns

Signage of Adani Group at Adani Defence and Aerospace booth during the Aero India 2023 at Air Force Station Yelahanka in Bengaluru, India, on Monday, Feb. 13, 2023.
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Index provider MSCI said that it will delay implementing weighting changes for some Adani Group companies until later this year, according to a Thursday announcement.

The change in plans came after MSCI earlier this month said it will reduce the weightings of Adani Enterprises, Adani Total Gas, Adani Transmission and ACC, a major Indian cement company the Adani Group acquired from Holcim last year. The decision was made after MSCI reassessed the number of shares that are freely traded, it had said.

Among the list of Adani companies, MSCI is delaying the measures for two companies: Adani Total Gas and Adani Transmission, according to its Thursday morning notice.

As of the end of January, the four Adani-related companies had a combined 0.4% weighting on MSCI's Emerging Markets Index, Reuters reported.

MSCI said the changes will be reflected in the May index review instead of February's. The firm explained the decision came "in light of potential replicability issues due to impact from price limit mechanisms in specific securities associated with the Adani Group."

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MSCI said it will apply special treatment for all Adani Group's associated securities, citing "ongoing uncertainty with relation to key input data for index construction."

As such, MSCI will not make any changes – including additions, deletions and constraint factor changes – in non-market capitalization weighted indexes and custom indexes such as the MSCI Factor, ESG, thematic and capped indexes, it said.

Shares of Adani Group companies mostly traded higher in Mumbai on Thursday, except for Adani Total Gas which fell roughly 2%. Adani Transmission inched 1% higher.

Adani Enterprises rose  2.7%, Adani Port and Special Economic Zone rose 2.3%, Adani Green Energy rose 2.4% and Adani Power rose 5%.

Source: https://www.cnbc.com/2023/02/16/msci-delays-weighting-cuts-for-two-adani-companies-cites-replicability-concerns.html


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