A reshuffle of the MSCI India Index, with effect from November 30 led to Bharti Airtel, Idea Cellular and Power Finance Corporation becoming a part of the index. The companies replace Housing Development & Infrastructure, Indiabulls Real Estate and Steel Authority of India in the index.
Amendments to indices can impact share prices, as passively managed funds (index) mimic the benchmark indexes. Some $321.9 billion was invested in exchange-traded funds linked to MSCI indexes at the end of October, according to MSCI.
From the MSCI Global small cap index, a total of 47 Indian stocks were removed while only 10 were added. Britannia Industries, Eros International Media, Patni Computer and Indian Overseas Bank were included. Housing Development & Infrastructure and Indiabulls Real Estate found their way into the MSCI Small Cap Index.
Prominent among those that were deleted from the small cap index include Dhanlaxmi Bank, Gujarat Pipavav Port, ING Vysya Bank, Pantaloon Retail, Kingfisher Airlines and United Breweries, among others.
A total of 351 additions and 398 deletions were made to the MSCI small cap index.
The stock of HDIL dropped 4.5 per cent on the BSE to Rs 74.95 a share on Wednesday. Indiabulls Real Estate was down by 3.2 per cent to Rs 66.05, which was a new low for the stock. SAIL fell by 5.2 per cent to Rs 93.85.
After gaining sharply in earlier part of the day, Bharti Airtel saw its stock price dropping marginally by 0.1 per cent to Rs 401.10, while that of Idea Cellular and PFC went up by around 4.5 per cent each to Rs 98.75 and Rs 167.90, respectively.