From the Asia Pacific region, MSCI has added 48 stocks and deleted 76, with the most changes in China. India saw four additions and one deletion.
The additions include Tata Elxis (estimated inflows of $228.5 million), Jindal Steel and Power ($182.3 mn), Adani Power ($181.3 mn) and AU Small Finance Bank ($94 mn). HDFC AMC (estimated outflows of $75 mn) was deleted from the index.
The changes announced by MSCI will be effective from June 1, while index funds are likely to realign their portfolios on May 31.
Except for AU SFB, analysts had predicted other potential changes to the index based on the share price movement during the review period. They had also estimated the exclusion of Indraprastha Gas. However, the stock has been retained in the index.
“MSCI has announced the list of changes to the MSCI India Standard Index and Small Cap Index. Most of the changes are largely in line with our expectations barring inclusion of AU SFB in the India Standard universe. Revision in foreign inclusion factor would have led to retention of Indraprastha Gas,” said Sriram Velayudhan, vice-president – ??alternative research, IIFL-Institutional Equities said in a note.
Meanwhile, MSCI has changed the weights for certain large stocks. Reliance Industries has seen an increase in its weight, which Velayudhan says could lead to passive inflows of $300 million. On the other hand, stocks that will see reduction in their weights include Vedanta (estimated outflows of $110 mn), Adani Green Energy (-$180 mn), NTPC (-$156 mn), Bharti Airtel (-$190 mn), Maruti Suzuki ( $100 mn) and Hindalco (-$80 mn).
The MSCI India Small Cap Index will see 44 additions, some of them include Go Colors, Policy Bazaar and MedPlus Health.