Following the latest changes announced on November 7, BSE, Voltas, Kalyan Jewellers, Alkem Laboratories and Oberoi Realty will become part of the MSCI Global Standard Index.
After including five stocks and not excluding any stocks, the net number of stocks in the adjusted MSCI India Standard Index will be 156. Additionally, a net inclusion of 13 stocks will be included in the small cap index, taking the total number of stocks in the Indian small cap index to 525.
According to Nuvama Alternative & Quantitative Research, net passive inflows from FIIs in India are expected to be around $2.5 billion.
Due to the latest correction, Voltas is expected to attract the highest inflows at $312 million, followed by BSE with possible inflows worth $259 million. Kayan Jewelers India is expected to see passive inflows of $241 million, while Oberoi Realty and Alkem Laboratories may attract $215 million and $201 million respectively, according to Nuvama estimates.
Adani Energy Solutions shares are also expected to be included in the index, but Adani Group shares are not included. MSCI provided a detailed explanation for not considering the stock, citing insufficient confidence in the stock’s free float.
HDFC Bank’s weight increases
HDFC Bank will see the second and final weighting increase in the MSCI index, which could result in additional inflows of around $1.88 billion, equivalent to 6.5 days of average daily volume (ADV).
In the August reshuffle, MSCI announced that it would increase the weighting of HDFC Bank in two phases.
MSCI Small Cap Index
A total of 13 stocks will also be included in the MSCI India Small Cap Index. These stocks include Eureka Forbes, Signatureglobal India, Aadhaar Housing Finance, JSW Holdings, PC Jewellers, Indegene, Bondada Engineering and DCM Shriram, among others.
The shares are expected to attract total passive inflows of approximately $71 million, according to Nuvama Alternative estimates.
Meanwhile, India’s share of the MSCI Emerging Markets Index will increase to nearly 19.8% from the current 19.3% due to the latest rebalancing. Abhilash Pagaria, head of alternative and quantitative research at Nuvama, said the rebalancing represents the highest weight increase of any emerging market index in terms of basis points.
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