MSCI quarterly review in August may see Cummins and 3 others entering India index

In the upcoming quarterly index review by MSCI Inc, Cummins India, and IDFC First Bank have a high probability of entering the India index, according to Emkay Alternative and Quantitative Research.
Global index aggregator MSCI Inc will announce the results of its quarterly review on August 10, and the changes, if any, will come into effect from September 1.

Cummins India and IDFC First Bank have gained 25% and 40%, respectively, since April. In fact, in 1 year, IDFC First Bank shares turned a multibagger, giving a whopping 132% returns.


“If they continue to trade above the current price levels, they would qualify the inclusion size cut-off by a comfortable margin,” Emkay said.

The entry of Cummins India and IDFC First Bank could result in inflows of $108 million and $101 million, respectively, Emkay said.

The brokerage sees potential for two more stocks to enter the index but with a low probability. These two stocks are Astral and Power Finance Corporation.

If the prices of Astral and Power Finance Corp increase by another 6-8% in the next one-and-a-half months, then both have high potential to enter the India index, Emkay said.

“Since their free-float market cap lies on the borderline of our expected size requirement, we have qualified them as a low probability candidate,” it said. If Astral and Power Finance Corp shares get included, it is likely to result in inflows of $96 million and $90 million, respectively.

In trade on Wednesday, shares of IDFC First Bank were up nearly 2% on the National Stock Exchange and hit an over 6-year high of Rs 76.80. Meanwhile, Cummins India shares gained 0.6% and touched a record high of Rs 1,867.

Astral and Power Finance Corp shares fell over 1% each to Rs 1,967.45 and Rs 200.35, respectively.

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