The highlight of this rejig will be HDFC Bank, which is set to gain weight in the index, attracting significant attention.
MSCI November ReJig Today: The quarterly reversal of the Morgan Stanley Capital International (MSCI) indices is scheduled for later today on November 25. Analysts predict that Indian equities will see a net inflow of around $2.5 billion in passive FII inflows. The highlight of this rejig will be HDFC Bank, which is set to gain weight in the index, attracting significant attention.
Following the adjustments, the number of India stocks in the MSCI Standard/EM Index will increase to 156, with five new inclusions and no deletions. Additionally, 13 stocks will be added to the smallcap index, taking India’s total to 525 in that segment.
“India has once again reached a major milestone in this rejig, with its representation in the MSCI EM index increasing from 19.3 per cent to around 19.8 per cent. This increase in weighting is the largest among all emerging markets in this reshuffle,” Nuwama Institutional Equities said.
China currently holds the largest share in the MSCI EM index, with 27 percent weight and 598 stocks. In contrast, India’s weight is 19.3 percent with 151 components.
After this update, MSCI Global Standard Index will include stocks like BSE, Voltas, Alkem Laboratories, Kalyan Jewelers and Oberoi Realty.
Voltas is expected to draw the highest inflow, crossing $300 million, while BSE could see inflows close to $260 million, according to Nuwama. Other companies including Kalyan Jewellers, Oberoi Realty and Alchem Laboratories are expected to receive passive inflows of $241 million, $215 million and $201 million respectively.
Before the rebalancing on November 25, shares of Voltas, BSE, Kalyan Jewelers and Oberoi Realty were trading between 2-5 percent.
Although Nuwama Institutional Equities was expected to include Adani Energy, MSCI explained its decision not to include the stock citing concerns about the stock’s free float. Additionally, the float for two other Adani Group companies, Adani Green Energy and Adani Power, has been reduced.
The spotlight will be on HDFC Bank, which is expected to increase weightage which could result in inflows of around $1.88 billion. MSCI had earlier announced a weight adjustment for HDFC Bank during the August rejig, opting to implement the change in two stages rather than a one-time adjustment.