Synopsis: Axis Capital expects Adani Energy Solutions and Laurus Labs to be added to the MSCI India Standard Index, while Eternal could see a higher index weight. The brokerage believes these changes may trigger significant passive fund inflows, with the final review due on August 12.
The MSCI rejig refers to the quarterly process where Morgan Stanley Capital International (MSCI), a leading global index provider, reviews and rebalances its stock indices. During this update, MSCI may add or remove stocks and adjust the weightings of companies within the indices.
MSCI has Quarterly Index Reviews (QIRs) in February and August and Semi-Annual Index Reviews (SAIRs) in May and November. While all four involve rebalancing, the May and November reviews are generally more comprehensive.
These adjustments are driven by factors such as a company’s market capitalization, trading volumes, and the proportion of shares available for public trading (free float). This process ensures that the indices stay aligned with current market dynamics and continue to be relevant for global investors.
For India, these changes have a direct impact on foreign investment flows and market sentiment, making MSCI rejig announcements closely monitored events in the financial markets.
Stocks in Focus Ahead of MSCI August Review
Eternal Ltd., Adani Energy Solutions Ltd., and Laurus Labs Ltd. are among the key stocks to watch ahead of the MSCI India Standard Index’s August 2026 review. Axis Capital expects Adani Energy Solutions and Laurus Labs to be included in the benchmark index, while Eternal is likely to receive a higher index weight.
The brokerage believes these changes could result in significant passive fund inflows, with Eternal expected to be the biggest beneficiary. The MSCI index review will be announced after market hours on August 12, and the changes will take effect from September 1.
Eternal Could See the Biggest Passive Inflows
Axis Capital estimates that Eternal could attract nearly $520 million (around ₹5,000 crore) in passive inflows if MSCI increases its weight in the India Standard Index during the August 2026 review. Such passive buying from index-tracking funds could provide strong support to the stock and improve trading volumes after the changes take effect.
The brokerage estimates the expected inflows could translate into buying of nearly 17.43 crore shares, making Eternal the biggest potential beneficiary of the upcoming MSCI rebalance.
Adani Energy Solutions and Laurus Labs Likely to Be Added
Axis Capital expects Adani Energy Solutions and Laurus Labs to be added to the MSCI India Standard Index, citing their current market capitalisation and alignment with MSCI’s inclusion methodology. If the additions are confirmed, both stocks could benefit from increased demand from passive funds tracking the benchmark.
According to the brokerage, Laurus Labs could attract passive inflows of around $410 million (approximately ₹3,942 crore), while Adani Energy Solutions may receive nearly $260 million (around ₹2,501 crore). These inflows are expected to come from index-tracking funds that rebalance their portfolios following the MSCI review.
Astral, SBI Cards, and Balkrishna Industries Face Exclusion Risk
On the other hand, Axis Capital expects Astral, SBI Cards and Payment Services, and Balkrishna Industries to face the risk of exclusion from the MSCI India Standard Index in the upcoming August review. If removed, these stocks could witness selling pressure from passive funds tracking the benchmark.
The brokerage estimates passive outflows of around $102 million (₹981 crore) for Astral, $110 million (₹1,058 crore) for SBI Cards, and $122 million (₹1,173 crore) for Balkrishna Industries. However, it noted that Balkrishna Industries remains a borderline case, meaning its exclusion is still uncertain and could depend on the final review.
Other Stocks on the Watchlist
Axis Capital also identified Glenmark Pharmaceuticals and Coforge as potential candidates for inclusion in the MSCI India Standard Index. However, both companies need further gains in their share prices before the MSCI cut-off date to strengthen their eligibility for the August review.
According to the brokerage, Glenmark Pharmaceuticals would require around a 10% rise in its share price, while Coforge would need approximately a 6% gain. Their final inclusion will depend on stock price performance before MSCI’s cut-off period later this month.
Final Review Depends on MSCI’s Price Cut-Off
The final additions and deletions will depend on MSCI’s price cut-off date, which can fall on any of the last ten trading sessions of July. As a result, the expected list of inclusions and exclusions could still change before the official announcement on August 12.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
