India to get $2.5 billion FII boost from MSCI rejig, 21 stocks to benefit

Following a quarterly rebalancing done by the global index services provider today, India's weightage in the coveted MSCI Emerging Markets (EM) index is set to increase from 18.3% to closer to 19% from May 31 and lead to possible FII inflows worth about $2.5 billion.

"The adjustments are slated for May 31, and India is expected to witness a net inflow of upwards of $2.5 billion in FII passive flows. With 13 inclusions and 3 exclusions, the net stock count post-rejig will be 146 for India in the MSCI Standard/EM Index. Additionally, there will be a net inclusion of 14 stocks in the Smallcap Index, bringing India's total stock count in the small-cap index to 497," Nuvama's Abhilash Pagaria said.

India's increase in weight from 18.3% to closer to 19% is the highest among any EM Index in this rejig in terms of basis points. China has the highest representation in MSCI EM Index, with a weight of 25.7% and 703 members in the index, compared to India's 18.3% weight with 136 stocks.


Amid a sustained bull run on Dalal Street, India's weightage in the MSCI EM index has catapulted from a mere 8% in 2020 to around 19%.

Stocks in focus

MSCI has announced that it will include 13 stocks - Policybazaar, Sundaram Finance, NHPC, Phoenix Mills, Indus Towers, Bosch, Jindal Stainless, Solar Industries, Torrent Power, Mankind Pharma, JSW Energy, Canara Bank and Thermax. At the same time, 8 stocks - AU Small Finance Bank, Vedanta, Macrotech Developers, Zomato, Polycab, Samvardhana Motherson, YES Bank and Suzlon Energy - will see their weights going up once the reshuffle is completed on May 31.

On the other hand, three stocks - Berger Paints, IGL and Paytm - will be excluded from the index.

Besides, the MSCI Smallcap Index will also see the inclusion of 29 stocks while 15 will be excluded.

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