MUMBAI: Global index services provider MSCI is likely to include seven Indian stocks to its standard index as part of its semi-annual review, according to Edelweiss Research. These likely inclusions could result inflows of about $1.4 billion (Rs 10,500 crore) into these seven stocks by the end of this month, according to the brokerage’s estimates.
Stocks such as Tata Power, SRF, Mphasis, Godrej Properties, Mindtree, IRCTC, and Zomato are most likely to be included. IPCA Laboratories and REC stand a chance of getting excluded from the index said Edelweiss in a research note.
MSCI will announce the changes in constituents for the MSCI global standard indices on November 12. The final changes will take place on November 30.
If included Tata Power, which rallied 127 per cent in the past six months, could see an inflow of Rs 1,800 crore. Edelweiss said SRF’s inclusion could result in passive fund purchases worth Rs 1,733 crore. Mindtree and IRCTC, which rallied 117 per cent and 142 per cent respectively in the past six months, can see passive flows of Rs 1,500 crore and 1,283 crore, respectively.
According to Edelweiss Research, newly listed unicorn Zomato is also likely to be included in MSCI if the index provider considers the free-float market capitalization with anchor lock-in period getting over.
Source : Edelweiss Alternative Research
MSCI indices are widely tracked globally, with several passive funds replicating their portfolios according to the stock weightages of its indices. These funds will be forced to buy or sell the stocks if the stock’s weight in the index is increased or reduced.
IPCA Laboratories, which remained flat in the last six months, could see an outflow of a little over Rs 800 crore while REC could see Rs 758 crore if they are excluded during the MSCI index rejig later this month, according to the brokerage.
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