As MSCI Equity Indexes is set to announce Index rejigs for May, Nuvama Alternative and Quantitative Research expect stocks including NHPC, Indus Towers, Policy Bazaar and Phoenix Mills to enter the MSCI Global Standard Index. India’s weightage in the MSCI Emerging Market Index is also set to increase to 20% by the second half of 2024. MSCI Equity Indexes will announce the results of the May review on May 15 around 3:30 am (Indian Standard Time).
What Happened: Nuvama Alternative and Quantitative Research said India's weight in the Emerging Market Index will continue to grow. India had around 8% weightage in early 2020 and is now closer to 18% as of May 13.
Currently, India has 136 stocks in the MSCI Standard/EM index and Nuvama expects it to reach 150 in the May review.
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According to Nuvama, stocks like Indus Towers, Policy Bazaar, Phoenix Mills, NHPC, Bosch, and Jindal Stainless have a high chance of being added to the MSCI Global Standard Index. Paytm, Berger Paints, and Indraprastha Gas are likely to be excluded from the Global Index.
Indus Tower is expected to see inflows of $224 million (around ₹1870 crore), Policy Bazaar may see inflows of $223 million (around ₹1862 crore) while Phoenix Mills could get around $207 million (around ₹1728 crore) NHPC have around $170 million (around ₹1419 crore).
Paytm might see outflows of $67 million (around ₹559 crore), Berger Paints to have around $111 million (about ₹926 crore) and Indraprastha Gas to have about $105 million (around ₹876 crore).
In the MSCI Small Cap Index, Waaree Renewables, Vedant Fashions, Va Tech Wabag, RR Kabel, Doms Industries, and Inox India are on the high conviction list of being included. While Borosil, Dreamfolks Services, Sharda Cropchemical, and Rajratan Global are likely to be excluded.
Why Is It Important: As India's weightage in the MSCI Emerging Markets index increases, more inflows will come into the country's equity markets. According to Nuvama, the current rejig is expected to bring in inflows of around $2 billion to India.
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