MSCI November Rejig: BSE, Voltas, Kalyan Jewellers among 5 inclusions, HDFC Bank’s weightage to increase

BSE, Voltas, Kalyan Jewellers, Alkem Laboratories and Oberoi Realty will now be a part of MSCI Global Standard Index following its latest rejig announced on November 7. The adjustments for the latest MSCI index rebalancing will take effect from November 25.

With stock 5 inclusions and no exclusions, the net stock count post-rejig will be 156 for India in the MSCI Standard Index. Additionally, there will be a net inclusion of 13 stocks in the Smallcap Index, bringing India's total stock count in the small-cap index to 525.

India is expected to witness a net FII passive inflows of around $2.5 billion, according to Nuvama Alternative & Quantitative Research.

Due to the latest rejig, Voltas is expected to attract the highest inflow of $312 million, followed by BSE with likely inflows worth $259 million. Kalyan Jewellers India is expected to see passive inflows amounting to $241 million, Oberoi Realty and Alkem Laboratories are likely to attract inflows to the tune of $215 million and $201 million, respectively, as per Nuvama estimates.

Adani Energy Solutions shares were also highly expected to be included in the index, however, the Adani group stock did not make the cut. MSCI provided a detailed explanation for not considering the stock, citing low confidence about the stock’s free float.

HDFC Bank Weight Increase

HDFC Bank will see the second and the final tranche of weight increase in the MSCI Index, potentially resulting in additional inflows of approximately $1.88 billion, which is equivalent to 6.5 days of average daily volume (ADV).

In its August rejig, MSCI had announced an increase in HDFC Bank’s weightage to be implemented in two stages.

MSCI Smallcap Index

A total of 13 stocks will also be added to the MSCI India Smallcap Index. These stocks include Eureka Forbes, Signatureglobal India, Aadhaar Housing Finance, JSW Holdings, PC Jewellers, Indegene, Bondada Engineering and DCM Shriram, among others.

These stocks are expected to attract total passive inflows of around $71 million, according to estimates by Nuvama Alternative.

Meanwhile, due to the latest rebalancing, India’s representation in the MSCI EM Index is set to increase from the current 19.3% to closer to 19.8%. This increase in weight, in terms of basis points, is the highest among any EM Index in this rejig, said Abhilash Pagaria, Head, Nuvama Alternative and Quantitative Research.

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