As many as four stocks, as long as they maintain their current price levels, will likely enter the MSCI Global Standard Index, said Abhilash Pagaria of Nuvama Institutional Equities in a report. They will cumulatively bring in $567 million as foreign inflow after the index rejig.
The four stocks are BHEL ($138 million inflow), Punjab National Bank ($142 million), Jindal Stainless ($149 million) and Oberoi Realty ($138 million).
The official announcement for index rejig is scheduled for February 12, with adjustments taking place on February 29. The global cut-off period for the selection of stocks spans from January 18-31. Pagaria expects the selection to happen in the initial few days of the cut-off period itself.
Some names can be included in the index if they move 5-10 percent higher from the current level; thus investors should also keep them on the radar. They are Dalmia Bharat, Union Bank of India, Alkem Labs, Solar Industries and Nykaa.
Indraprastha Gas and Petronet LNG might be excluded if they fall further from current levels, said Nuvama.
In 2023, India's stock count in the MSCI Standard index has risen 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 nine
Indian stocks were included.
The notable factors contributing to this increase in 2023 include India's substantial rally compared to other Emerging Markets and MSCI's shift from semi-annual to quarterly rebalancing for stock inclusions/exclusions.
As of December 8, India commands a 16.9 percent share in the MSCI Emerging Market Index, another index by MSCI. “With India's current momentum and outperformance compared to other emerging markets, we project our index representation could cross 20 percent by early to mid-2024,” said Pagaria.
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