The MSCI India Index has seen 13 additions and 3 deletions in the May review, an official statement said on May 15. Among notable changes, Paytm parent One97 Communications has been excluded from the Global Standard index while Indus Towers, PB Fintech, Phoenix Mills bagged an entry.
Will adjustments slated to come into effect from May 31, Nuvama Alternative & Quantitative Research expects a net inflow of upwards of $2.5 billion in FII passive flows.
Who gets an entry and who got snubbed?
Among the 13 stocks that got included in the MSCI Global Standard index, PB Fintech stands to witness the maximum inflows of $283 million, followed by Sundaram Finance at $243 million, as per calculations by Nuvama Alternative.
NHPC, Phoenix Mills and Indus Towers, stocks that were also included are likely to see inflows in the range of $216-234 million.
Meanwhile, Bosch, Canara Bank, Jindal Stainless, JSW Energy, Mankind Pharma, Solar Industries, Thermax and Torrent Power will likely garner inflows anywhere between $154-185 million each.
In contrast, Paytm, which got thrown out of the Global Standard index is estimated to witness outflows worth $70 million. Aside of Paytm, Berger Paints and Indraprastha Gas have been excluded, making them vulnerable to $117 million and $113 million worth of outflows, Nuvama Alternative noted.
Changes in MSCI's Smallcap index
Paytm and IGL - while being excluded from the MSCI Global Standard index - have entered the MSCI India Smallcap Index in the review, with 29 additions and 15 deletions in total, here.
Aside from the two, other notable additions include Aditya Birla Sun Life AMC, Doms Industries, RR Kabel, Va Tech Wabag, Tips Industries, Gillette India, HUDCO and Puravankara.
The 29 additions to the Smallcap index is likely to drive cumulative inflows worth $273 million, Nuvama Alternative stated.
Coming to exclusions, the major names include Indoco Remedies, Polyplex Corp, Alok Industries, Rajratan Global Wire, Dreamfolks Services.
India's rise drives bullishness
Nuvama Alternative expects India's weight in the MSCI Emerging Market Index to rise further and hit the 20 percent mark in the second half of 2024.
With the latest rejig, India's representation in the MSCI EM index is set to
increase from the current 18.3 percent to closer to 19 percent. This increase in weight, in terms of basis points, is the highest among any EM Index in this rejig, Nuvama highlighted.
Abhilash Pagaria, head, Nuvama Alternative & Quantitative Research also remains extremely bullish on India, especially with active participation from mutual funds and HNI/retailers in the Indian equity markets. "We should anticipate many more inclusions in the EM Index. We are still at the tip of the iceberg," Pagaria said.
China currently holds the highest representation in the MSCI EM index with a weight of 25.7 percent and 703 members in the index, compared to India's 18.3 percent weight with 136 stocks.
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