MSCI has announced the inclusion of five Indian companies into its Global Standard Index, a decision that brokerage firm Nuvama predicts will elevate India’s representation on the index to 20%, thereby reducing the disparity with China.
As of now, the index will feature 156 Indian stocks, which is only a quarter of the 598 Chinese stocks included, indicating significant potential for further Indian stock additions in the future. The changes will officially take effect after market hours on November 25.
This latest adjustment will raise India’s weight in the index to a historic 19.8%, up from 19.3%, while China’s share has decreased slightly to 26.8% from 27%. According to Nuvama Alternative and Quantitative Research, this shift is expected to attract approximately $2.5 billion in passive inflows into Indian equity markets.
China currently holds the largest weight in the MSCI Global Standard Index, with India occupying the second position since late 2021. The newly added companies include Voltas, a leading air conditioner manufacturer; Oberoi Realty, a prominent real estate developer; BSE, the stock exchange operator; Kalyan Jewellers; and Alkem Laboratories, a pharmaceutical company.
Following MSCI’s previous rebalancing in August, which saw seven stocks added, Indian markets experienced an influx of around $3 billion into equities.
“We maintain an optimistic outlook on India, particularly given the robust participation from mutual funds and high-net-worth individuals (HNIs) as well as retail investors. We expect to see many more Indian stocks included in the emerging markets index,” stated Abhilash Pagaria, head of research at Nuvama.
In addition to these new inclusions, seven existing stocks have also seen their weightage increase within the index. Notably, HDFC Bank has become the highest-weighted Indian stock in MSCI indices at 7.08%, surpassing Reliance Industries at 6.08%. Importantly, no Indian companies have been removed from the MSCI Global Standard Index in November.
Moreover, around 13 firms—including Eureka Forbes, Indegene, and PC Jeweller—have been added to the MSCI Small Cap Index, raising the total number of small-cap stocks to 525.
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