India count in MSCI EM index now at 131

livemint.com:

MUMBAI : Global index provider MSCI has included nine Indian stocks in its MSCI Standard Index in the latest round of rebalancing, which will take India’s representation in the emerging market (EM) index to the highest-ever count of 131 stocks. The rebalancing, which will lead to minor cuts in the weights of some big names, could result in India attracting passive inflows of $1.5 billion after the changes take effect on 30 November.

“With this fresh inclusion, India’s representation on the EM index will reach an all-time high, marking a significant increase, with its weight doubling over the past three years," said Abhilash Pagaria, head, Nuvama Alternative & Quantitative Research. The inclusion of IndusInd Bank, Suzlon Energy, Persistent Systems, APL Apollo Tubes, Polycab India, Tata Motors, Macrotech Developers, Paytm ( One 97 Communications) and Tata Communications will see India’s weight in the index rise to around 16.3%, up from 15.9% currently.

Suzlon, Persistent Systems and APL Apollo have migrated from the Small-cap Index to the Standard Index. Since global fund managers use MSCI indices to allocate funds to emerging markets, the rise in weight may attract over $1.5 billion from passive trackers of this index, Pagaria said.

Suzlon, Tata Motors and Paytm traded up between 2% and 4% during the day, following news of the inclusion. To adjust for the country weighting in the index after the fresh inclusion, leading companies such as Reliance Industries, ICICI Bank, Infosys and HDFC Bank could witness minor weight reductions and consequent outflows between $100 million and 200 million each, according to Pagaria.