Adani Group shares: How MSCI's review may impact amid selling pressure?

 Adani Group shares: How MSCI's review may impact amid selling pressure?

Adani Group shares were mixed in early deals on Friday after reducing free floats of Adani Enterprises, Adani Total Gas, Adani Transmission and ACC, index provider MSCI said, however, free floats of rest of the companies will remain the same. MSCI defines free float as the proportion of outstanding shares that are available for investors to buy in the public equity markets.

Shares of Adani Total Gas & Transmission hit the lower circuit of 5% on BSE, while ACC scrip was trading marginally lower. At the time of writing the story, the group's flagship firm Adani Enterprises bounced back to trade slightly above the day's low. The four companies had a weighting of 0.4% in the MSCI Emerging Markets Index as of January 30. These changes have come into effect from 1 March.

“Reduction of weighting by MSCI may increase selling pressure on Adani Group shares, as some ETFs and index funds that use MSCI as benchmark may resort to selling to adjust their portfolios. We feel most of the brunt of the review will be on stocks other than Ambuja Cements and ACC as these were acquired recently and free float should ideally not be an issue with these two stocks," said Head of Research at Stoxbox Manish Chowdhary said.

Following the review, MSCI sought feedback from market participants on Adani Group's position and said it was closely monitoring any information that could affect the group's securities in the wake of a January 24 report by US short seller Hindenburg Research for its gauge Will prevent you from being eligible.