MSCI Global Standard Index has granted an entry to Hindustan Aeronautics Ltd (HAL), Max Healthcare and Sona BLW Precision to its India Standard Index in its May 2023 rejig. On the flip side, it removed Adani Transmission and Adani Total Gas from the index. The stocks shall be shuffled on May 31, 2023.
According to a report by Nuvama Alternative & Quantitative Research, the exit of two stocks of the Adani Group may trigger an outflow of $ 189 million in Adani Transmission and $ 167 million in Adani Total Gas as 18 million shares each, of both companies, will be offloaded from the index.
Indus Towers is another company that will be excluded. This will lead to an outflow of $ 84 million and 44 million shares will be excluded from the index.
Analysts at Nuvama expect that Max Healthcare will carry a weight of 0.52 and witness an inflow of $ 312 million. Around 47 million shares will be added to the index. HAL will carry a weight of 0.33 and it will likely bring an inflow of $196 million. Sona BLW Precision’s inclusion in the index will carry a weight of 0.29 and it will bring $171 million inflows.
Meanwhile, 21 stocks will see an increase in their weightage, while 16 stocks will see a decline in their weightage. The weights of Maruti Suzuki India, Kotak Mahindra Bank, Interglobe Aviation, Samvardhana Motherson International, Cipla, Yes Bank, Bandhan Bank and NTPC will increase among others. Reliance Industries, Infosys, ICICI Bank, JSW Steel, Axis Bank, Hindustan Unilever, Tech Mahindra, Dr Reddy’s Laboratories and Bharti Airtel will see a decline in their weightage, among other shares.
The MSCI Index is widely followed by institutional investors. In fact, many of them use it as a benchmark for their investments. Whenever the weightage of a stock increases, or it is included in the index, it leads to an inflow of investments and vice-versa.
Written By Simran Bafna
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