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MSCI November rejig: Voltas, Kalyan Jewellers, Oberoi Realty among 5 companies included

Rebalancing to attract net inflow of $2.5 billion in FII passive flows

MSCI is a provider of global indices and benchmark related products and services to investors worldwide. MSCI indexes are globally tracked by investors who allocate funds based on the weightage given to countries and stocks.

Mumbai, November 25 MSCI Inc, or Morgan Stanley Capital International Inc, (MSCI), has added five companies including Voltas, Oberoi Realty and Bombay Stock Exchange in the MSCI Global Standard/Emerging Market (EM) Index, which is likely to bring in passive inflows of around $2.5 billion from foreign institutional investors (FII) into the country.

The other stocks that have been included are Alkem Laboratories and Kalyan Jewellers India. The changes in constituents were announced on November 6 and has come into effect from November 25.

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“India is expected to witness a net inflow of approx USD 2.5 billion in FII passive flows. With 5 inclusions and no exclusions, the net stock count post-rejig will be 156 for India in the MSCI Standard/EM Index,” said Abhilash Pagaria, Head, Nuvama Alternative & Quantitative Research.

India has again achieved a milestone in the current MSCI rejig, as its representation in the MSCI EM Index is set to increase from the current 19.3 per cent to closer to 19.8 per cent. This increase in weight, in terms of basis points, is the highest among any EM Index in this rejig, he said.

Currently, the highest representation in the MSCI EM Index is China, with a weight of 27 per cent and 598 members in the index.

“I remain extremely 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 still at the tip of the iceberg,” Pagaria said.

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MSCI India Domestic Small Cap Index saw addition of 13 companies including Eureka Forbes, Aadhar Housing Finance, JSW Holdings, PC Jeweller, DCM Shriram and Refex Industries. With this India’s total stock count in the small-cap index has reached 525.

Pagaria said from the conviction list, only Adani Energy (ADANIENS) did not make the cut.

In its announcement for the MSCI Global Standard Indexes, MSCI said that as per publicly available disclosures, Adani Energy has been issued a show cause notice by the Securities Exchange Board of India (SEBI) for potential wrongful categorization of shareholding of certain entities.

“In light of the uncertainty regarding its free float, MSCI will not implement any increases in the Number of Shares (NOS), Foreign Inclusion Factor (FIF) and Domestic Inclusion Factor (DIF) for Adani Energy Solutions as part of the November 2024 Index review and until otherwise announced,” MSCI had said.

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MSCI said it continues to monitor Adani Group and associated securities, including related to free float.