MSCI, the global index aggregator, will review its indexes tomorrow, May 15, with the potential for $2 billion in passive inflows into local companies.
The MSCI (Morgan Stanley Capital International) Index is a globally recognized benchmark for tracking equity market performance across various regions and sectors. It provides investors with a comprehensive measure of stock market trends, facilitating comparisons and investment decisions based on the performance of constituent stocks.
As of May 13, India’s weight in the MSCI Emerging Market Index was closer to 18%, up significantly from 8% in early 2020. By the second half of 2024, Nuvama Alternative & Quantitative Research expects India’s weight in the emerging market index (EM) to exceed 20%.
Meanwhile, there are some stocks that have emerged as strong contenders for inclusion in the MSCI Global Standard Index which include Indus Towers, PB Fintech, Phoenix Mills, Sundaram Finance, Solar Industries India, NHPC, Bosch, Jindal Stainless, Torrent Power, Mankind Pharma, JSW Energy, and Canara Bank
Additionally, Nuvama anticipates the maximum flow for Indus Towers at $224 million, followed by PB Fintech and Phoenix Mills at $223 million and $213 million, respectively. For others, flows of around $144-207 million are estimated.
As per Nuvama, there three socks namely One 97 Communications Ltd (Paytm), Berger Paints, and Indraprastha Gas Ltd (IGL) may see exclusions from the standard index, which may result in up to $111 million outflows.
Additionally, Waaree Renewable, Vedant Fashions Ltd, Va Tech Wabag Ltd, Doms Industries, Inox India, Time Technoplast, and Sanghvi Movers may be included to the MSCI Smallcap Index.
Abhilash Pagaria, head, of Nuvama Alternative & Quantitative Research, attributed India’s rise in the MSCI EM space to the country’s standardized Foreign Ownership Limit in 2020, robust performance by Indian equities, particularly in the midcap segment, and the relative underperformance by other EM packs, especially China.
Written by:- Abhishek Singh
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