Abhishek Sharma

Changes to MSCI India Small Cap Index with new entrants and removals

As part of May 2023 rejig, Morgan Stanley Capital International has announced the inclusion of Max Healthcare, Hindustan Aeronautics, and Sona BLW Precision to its India Standard Index. Nuvama Alternative & Quantitative Research's preliminary calculations show that this might bring in $295 million for Max Healthcare, $195 million for HAL, and $175 million for Sona BLW.

Adani Transmission, Adani Total Gas, and Indus Towers, on the other hand, have been removed from the MSCI India Standard Index, which may result in outflows of $201 million, $186 million, and $84 million, respectively.

Kotak Mahindra Bank's Weight Rise in MSCI Index Could Result in Influx of $810 Million

The index provider also changed the composition of its India Small Cap index. KFin Technologies, Kaynes Technology, Bikaji Foods, Fusion Micro Finance, Syrma SGS Technology, Religare Enterprises, NMDC Steel, ACE, Ujjivan Small Finance Bank, Maharashtra Seamless, RVNL, and IRCON are recent entrants to the list. Max Healthcare, Polycab India, Gillette India, Dhani Services, Radico Khaitan, Astec Lifescience, Dilip Buildcon, Thyrocare, and PC Jewellers are among the companies that have been removed from the index.

According to the current business news in India, the largest weight rise in Kotak Mahindra Bank, according to MSCI, might result in an influx of $810 million. The bank's foreign ownership decreased by 1.47 percentage points in the March quarter, opening up the foreign space and making it suitable for weight expansion.

The MSCI index is an important financial benchmark used by investors to track the performance of various stocks in emerging markets, including India. The weight of certain stocks in the MSCI index is expected to increase, while the weight of others is expected to decrease. Maruti Suzuki, ONGC, Ultratech Cement, Interglobe Aviation, and Zomato are some of the stocks that will see their weight increase in the MSCI index.

On the other hand, stock market news now shows prominent weight reductions are expected in Reliance Industries, Infosys, ICICI Bank, JSW Steel, HDFC, and Tata Consultancy Services. This means that the weight of these stocks in the MSCI index is expected to decrease. This could lead to an outflow of funds from these stocks, worth $155 million, $134 million, $94 million, $80 million, $71 million, and $61 million, respectively.