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Global Index Provider MSCI To Cut Free Float Of 4 Adani Companies: Report

The four companies had a combined 0.4 per cent weighting in the MSCI emerging markets index as of January 30. The changes come into effect on March 1

Global financial index services provider MSCI has decided to cut weightages of four Adani group companies after US-based short seller alleged improper use of offshore tax havens and stock manipulation.

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MSCI has decided to cut free float of its flagship company Adani Enterprises, Adani Total Gas, Adani Transmission and ACC, according to news agency Reuters.

The four companies had a combined 0.4 per cent weighting in the MSCI emerging markets index as of January 30. The changes come into effect on March 1.

The development comes days after US-based short seller Hindenburg Research levelled allegations of stock price manipulation and improper use of tax haven countries.

MSCI Inc said it has received feedback from a range of market participants concerning the eligibility and free float determination of specific securities associated with the Adani Group for the MSCI Global Investable Market Indexes (GIMI).

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

Meanwhile, on Thursday, Norway’s $1.35 trillion sovereign wealth fund announced that it has sold all its remaining stake in companies belonging to Adani Group, as per a Reuters report. In relation to its annual report on responsible investments published on Thursday, the fund revealed that it has monitored Adani Group companies for many years regarding ESG compliance. 

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Christopher Wright, the fund's head of ESG risk monitoring, said at a news conference, “We have monitored Adani for many years (on ESG) issues, many on their handling of environmental risks. […] Since year-end, we have further reduced in Adani companies. We have no exposure left.”

Life Insurance Corporation of India (LIC) said that its investments in Adani Group companies are still in green, implying that the insurer is sitting on unrealised gains from its Adani investments. This was conveyed during LIC's earnings call that took place after the state-backed insurer reported that its income from investments rose to Rs 84,889 crore from Rs 76,574.24 crore a year ago.
 

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