MSCI is an acronym for Morgan Stanley Capital International. It is an investment research firm that provides stock indexes, portfolio risk and performance analytics, and governance tools to institutional investors and hedge funds. MSCI is perhaps best known for its benchmark indexes—including the MSCI Emerging Market Index and MSCI Frontier Markets Index—which are managed by MSCI Barra. The company continues to launch new indexes each year.
Capital International introduced a number of stock indexes in 1965 to mirror the international markets—the first global stock market indexes for markets outside the United States. When Morgan Stanley bought the licensing rights to Capital’s data in 1998, it began using the acronym MSCI, with Morgan Stanley becoming its largest shareholder. In 2004, MSCI acquired Barra, a risk management and portfolio analytics firm, for approximately $816.4 million. The merger of both entities resulted in a new firm, MSCI Barra, which was spun off in an initial public offering (IPO) in 2007, and began trading on the New York Stock Exchange (NYSE) under the stock ticker MSCI. The firm became a fully independent, stand-alone public company in 2009.
MSCI, an index provider, said it has reduced the free-float designations of four Adani group stocks, but did not remove any of the stocks from its global indices. MSCI has cut the free floats of Adani Enterprises, Adani Total Gas, Adani Transmission and ACC, which had a combined 0.4 per cent weighting in the MSCI emerging markets index as of January 30. As per estimates by Nuvama Alternative & Quantitative Research, the move could lead to a total of $428 million in outflows from the four Adani group companies.
Adani Enterprises is expected to see $161 million in outflows, followed by Adani Transmission ($145 million), Adani Total Gas ($110 million) and ACC ($12 million), as per the brokerage estimate.
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. MSCI said the free floats for the remaining Adani group companies in MSCI indices will remain the same. The changes come into effect on March 1.
MSCI, meanwhile, added Bank of Baroda and CG Power & Industrial in MSCI India index while removing Biocon.
MSCI had earlier 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.
MSCI said it had determined that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float pursuant to our methodology.
“This determination has triggered a free float review of the Adani Group securities. MSCI will implement the resultant free float changes and associated market capitalization determinations in connection with the February 2023 Index Review using data as of cut-off dates as described in Section 3.1.9 of the GIMI methodology,” it had said.