Index provider Morgan Stanley Capital International (MSCI) will announce the results of its quarterly review on February 13 and public sector companies are ruling the list of probable inclusions to MSCI Standard index, said Nuvama Alternative & Quantitative Research.
NMDC, Punjab National Bank, BHEL, Union Bank of India, NHPC are likely to be added to MSCI Standard index, as per the calculations done by the firm. This will bring inflows worth $186 million, $180 million, $156 million, $140 million and $223 million, respectively, to these stocks.
NHPC's free float market capitalisation increased after the government pared 3.5 percent in an offer for sale in January. "NHPC OFS concluded on the second day of the cutoff date. Considering day two onwards, it's highly likely to make the cut," said Nuvama Research's Abhilash Pagaria.
The five stocks gained between 0.5 percent to 1 percent in the opening trade. PNB was the biggest gainer, up 1.13 percent at Rs 125.30 on the NSE at 9.25 am.
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Cumulatively, along with additions to MSCI Smallcap index, Indian equity markets are set to see about $800 million-$1 billion of inflows on February 29 when the adjustments are made by funds and ETFs benchmarked against MSCI indices.
Smallcap inclusions
Several recently listed stocks will likely be making it to MSCI Smallcap index. These included Cello World, Mamaearth and Honasa Consumer. This will bring inflows worth $12 million, $7 million and $5 million in these stocks, respectively.
Also Read: Mamaearth Q3 results: Honasa Consumer profit up 250% to Rs 26 crore
The other probable inclusions are Jaiprakash Associates, RR Kabel, Signature Global, Paisalo Digital, RattanIndia Power, KPI Green Energy, Swan Energy, MSTC, Protean e-gov, Ethos, J Kumar Infraprojects, DB Realty, SBFC Finance, Sandur Manganese, IIFL Sec, Aurinpro Solutions, Dhanuka Agritech, Netweb Tech, Inox Wind, Kesoram Inds, Fedbank Financial, Spicejet and Jupiter Life.
Prestige Estates, GMR Airports, RVNL and Privi Specialty are likely to be excluded from the smallcap index.
"India's representation in the MSCI emerging market pack held steady at around 8 percent from 2015 until October 2020. However, since November 2020, we have nearly doubled our representation, currently standing at 17.9 percent. This can surpass 20 percent in early 2024," Pagaria said.
In 2023, India's stock count in the MSCI Standard index rose to 131, with the inclusion of a net of 17 Indian stocks over the past four reviews. This marks an improvement from 2022, where only a net of 9 Indian stocks were included, he added.
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