D-Street likely to see $2.5 billion inflows as MSCI increases India weights
passive funds when the global index provider MSCI rebalances its index on November 25.
In an announcement on Thursday, MSCI said it has added five stocks — BSE, Voltas, Alkem Laboratories, Kalyan Jewellers, and Oberoi Realty — to its Global Standard Index; while reducing the weights of Adani Green, RIL, ICICI Bank, Infosys, GMR Airports, and Adani Power.
Passive funds, such as exchange traded funds (ETFs), structure their portfolios on the basis of these indices. When MSCI adds or removes stocks from its indices, these funds must also follow suit.
According to Nuvama Alternative & Quantitative Research, Voltas is projected to attract the highest inflow at $312 million, followed by BSE with $259 million. Kalyan Jewellers, Oberoi Realty, and Alkem Labs are estimated to receive $241 million, $215 million, and $204 million, respectively.
«With this rejig, India is set to see a net inflow of approximately $2.5 billion in FII passive flows,» said Abhilash Pagaria. head, Nuvama Alternative & Quantitative Research. «With five inclusions and no exclusions, India's stock count in the MSCI Standard Index will rise to 156.»
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