MSCI, formerly Morgan Stanley Capital International, is a leading provider of investment decision support tools and services, including widely followed global equity indexes.
The MSCI Index series comprises globally influential benchmarks extensively monitored by institutional investors and fund managers worldwide. These indexes aim to mirror the performance of diverse equity markets, encompassing developed, emerging, and frontier markets across various regions and sectors.
Index is tailored to track specific markets or investment styles like value or high dividend yield, MSCI indexes’ performance can be influenced by shifts in economic conditions, prompting adjustments by MSCI to align with evolving market dynamics.
MSCI conducts routine index rebalancing, typically biannually in May and November, ensuring the indexes accurately reflect prevailing market conditions and uphold their representational integrity.
During this process, MSCI revises constituent stock weights based on updated market capitalizations and other pertinent factors like liquidity and free-float adjustments.
The rebalancing activities may trigger significant capital movements as institutional investors and fund managers readjust their portfolios to mirror the revised index compositions, potentially driving substantial trading volumes amounting to billions of dollars.
On May 31st, Indian equity markets are anticipated to experience significant inflows surpassing $2 billion due to the adjustments made to the MSCI Global Standard Index and MSCI India Smallcap Index.
This quarterly rebalancing, announced on May 15th and implemented on May 31st, 2024, involves the addition of 13 stocks, as detailed in the table below.
| Addition of Stocks | Inflows($ in Million) |
| Bosch Ltd | 144 |
| Canara Bank | 126 |
| Indus Towers Ltd | 168 |
| Jindal Stainless Ltd | 142 |
| JSW Energy Ltd | 127 |
| Mankind Pharma Ltd | 138 |
| NHPC Ltd | 179 |
| PB Fintech Ltd | 232 |
| Phoenix Mills Ltd | 187 |
| Solar Industries India Ltd | 149 |
| Sundaram Finance Ltd | 198 |
| Thermax Ltd | 122 |
| Torrent Pharmaceuticals Ltd | 140 |
Below are the three stocks that have been excluded from the index.
| Deletion of Stocks | Outflows($ in Million) |
| Berger Paints India Ltd | 94 |
| Indraprastha Gas Ltd | 89 |
| One 97 Communications Ltd | 57 |
Written by Omkar Chitnis
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