Nine new stocks will be part of the MSCI India Index as the rejig comes into effect from Thursday. These stocks are IndusInd Bank, Suzlon Energy, Persistent Systems, APL Apollo, Polycab, Macrotech Developers, Tata Motors A, One 97 Communications (Paytm), Tata Communications.
Moreover, seven stocks viz. Zomato, Hindustan Aeronautics (HAL), Jio Financial Services, Vedanta, PFC, REC and Colagate Palmolive will see their weights go up, a Nuvam report said. As a result of the weight changes, passive inflows between $66 million and $17 million are likely to be seen for these stocks — Zomato at the upper end while Colgate Palmolive at the lower.
According to Nuvama’s estimates the addition is likely to result in combined passive inflows of $1.50 billion.
With no exclusions, India’s stock count will rise to 131 post the rebalancing exercise with weights set to move close to 16.3%.
India’s representation in the EM index will reach an all-time high, marking a significant increase over the past three years, almost doubling its weight, the report said.
Though most of the impact is priced-in, Thursday will be more of a volume impact day, it said further.
Suzlon Energy, Persistent Systems, APL Apollo’s inclusion will see these stocks exiting the MSCI Smallcap Index.
The rejig exercise will also see inclusions and exclusions happening in the MSCI Smallcap Index with 42 counters getting added to the index while 19 stocks making an exit from this index.
The entrants include the likes of Gokaldas Exports, SJVN, Hindustan Construction Company, Ptc India, Gateway Distriparks, Arvind Fashions, Electrosteel Castings, DB Realty, Orient Cements, Gabriel India, Astra Microwave, Lloyds Engineer among others.
Meanwhile, other notable exclusions from the MSCI Smallcap Index are Jindal Stainless, Dalmia Bharat, Vodafone Idea, BHEL, Linde India, Thermax, ACC, Indian Bank and Escorts Kubota.
An earlier research report by Nuvama had noted IndusInd Bank decreasing its foreign shareholding to 62.6%, meeting the minimum headroom requirement of 15%.
“This development is expected to pave the way for its inclusion with a 0.5 factor in the November 2023 review,” the brokerage said. IndusInd Bank’s – a Nifty stock – inclusion event was widely anticipated and some of the impact has already been factored into the stock price, the note said further.
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