UPDATE 2-MSCI Q1 profit falls, parent to offload 28 pct stake

(Recasts, adds conference call details, share movement)

BANGALORE, April 9 (Reuters) - Investment analysis firm MSCI Inc (MXB.N: Quote, Profile, Research) posted a 17.1 percent fall in first-quarter profit and said its parent Morgan Stanley (MS.N: Quote, Profile, Research) will offload 28 percent stake, sending its shares to their lowest levels since its IPO in November last year.

MSCI said Morgan Stanley, which currently holds 81 percent stake in the investment analysis firm, will sell up to 28 million of its class A common shares.

Based on MSCI's closing stock price Tuesday on the New York Stock Exchange, the sale amounts to more than $860 million.

Morgan Stanley had previously indicated that it might sell a portion of its ownership interest in MSCI and ultimately divest its entire stake.

MSCI, formerly known as Morgan Stanley Capital International, manages more than 100,000 equity, fixed income and hedge fund indexes that form the basis for investment funds and derivatives. It also sells Barra risk management tools for portfolio managers

EXPENSES SWIPE QUARTERLY PROFIT

The company posted a profit of $17.9 million, or 18 cents a share. Total operating revenue rose 20.5 percent to $105.0 million.

An analyst expected the company to earn 15 cents a share, before special items, on revenue of $105.7 million, according to Reuters Estimates.