MSCI Rejig: India may even see $2.5 billion FII inflows

May 16, 2024 | blog

Mumbai: Global index providers supplier MSCI has included 13 Indian shares in its Global Standard Index and eliminated three. That takes the whole depend of home shares on the MSCI indices to 146, up from 136. The change is scheduled for May 31 and India might doubtlessly witness an influx of $2.5 billion from world passive funds, the best amongst any rising market within the present index rejig.

Global passive funds, comparable to exchange-traded funds, construction their portfolios based mostly on these indices. Any change in composition prompts these funds to regulate their allocations. The newly included shares are JSW Energy, Canara Bank, Indus Towers, PB Fintech, Sundaram Finance, and NHPC. Berger Paints has been dropped, whereas Indraprastha Gas and Paytm’s guardian, One 97 Communications, have been downgraded to the small-cap index.

“India has once again achieved a major milestone in this rejig, as its representation in the MSCI EM Index is set to increase from the current 18.3% to closer to 19%,” mentioned Abhilash Pagaria, head of Nuvama Alternative & Quantitative Research. “The adjustments slated for May 31 could witness a net inflow of upwards of $ 2.5 billion in FII passive flows.”


Weight raised for some shares
Online insurance coverage aggregator PB Fintech, which operates Policybazaar, is prone to see an inflow of ₹2,400 crore ($149 million) with the MSCI inclusion. Sundaram Finance and NHPC might appeal to an influx of about ₹2,000 crore from passive funds. Similarly, Phoenix Mills, Indus Towers and Bosch’s native unit are anticipated to obtain between ₹1,500 crore and ₹2,000 crore.

Berger Paints, Indraprastha Gas and Paytm are anticipated to see an outflow of over ₹2,500 crore.

Also, some shares comparable to AU Small Finance, Vedanta, Macrotech and Zomato have seen a rise in weight and, consequently, might see an influx of ₹300 crore to ₹700 crore.
Housing Urban Development Corp., Vendant Fashion, RR Kabel, Gillette India and Force Motors are amongst 29 shares which were added to the small-cap index. About 15 shares, together with Alok Industries, Brightcom, Polyplex and Greaves Cotton have been faraway from the index.

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