The MSCI rejig adjustments on Friday are expected to bring in net inflows of about $2.5 billion in FPI passive flows. Most of the price action is already factored in, and today will primarily be a liquidity event in the last 30 minutes.
With 13 inclusions and 3 exclusions, the net stock count post-rejig for India will be 146 in the MSCI Standard/ EM Index. Additionally, there will be a net inclusion of 14 stocks in the Smallcap Index, bringing India’s total stock count in the small-cap index to 497.
Paytm parent One97 Communications has been excluded from the MSCI Global Standard index, while PB Fintech, Sundaram Finance, Mankind Pharma and JSW Energy are making an entry. Stocks such as Zomato, AU Small Finance and Vedanta are seeing an increase in weightage.
India’s representation in the MSCI EM Index is set to increase from the current 18.3 per cent to nearly 19 per cent. This increase in weight, in terms of basis points, is the highest among any EM Index in this rejig. China, with a weight of 25.7 per cent and 703 members, has the highest representation in the MSCI EM Index.
“I remain bullish on India, especially with active participation from mutual funds and HNI/ retailers in the Indian equity markets. We should anticipate many more inclusions in the EM index. We are just beginning to scratch the surface of our potential. There is enormous potential for more additions to happen for India,” said Abhilash Pagaria, Nuvama Alternative & Quantitative Research.