MSCI rejig: LIC, Meesho, Coforge set to gain from index inclusion. How much inflows could they attract?

Index services provider MSCI announced several additions and exclusions of Indian stocks to its indices on Thursday following its November review. The changes will increase India’s overall weight in the MSCI Emerging Markets Index to 11.7%, potentially attracting passive inflows of around $2 billion, according to Nuvama.

The changes will take effect from November 30. Nuvama has estimated the potential inflows and outflows for each stock added to or excluded from the indices.

MSCI Standard Index: Additions and exits

MSCI will add Life Insurance Corporation of India (LIC), Coforge, Meesho and Adani Green to its India index, while removing PI Industries. Among the additions, Nuvama expects Coforge to attract the largest inflows, worth $630 million, following its inclusion in the international index.


LIC is expected to see inflows of $468 million, while Meesho and Adani Green could attract $348 million and $307 million, respectively. PI Industries, which will be excluded from the index, is expected to see outflows of $119 million.

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Along with the new additions and exclusions, several stocks will see their weights adjusted in the MSCI Standard Index. Among these, Nuvama expects Groww to attract the highest inflows of 97 million following an increase in its index weight.Other stocks expected to see inflows include Lenskart Solutions (85 million), JSW Steel (6 9million),Adani Energy Solutions(60 million), Coal India (52 million),Paytm (48 million), Bharat Forge (24 million),OFSS(23 million), Zydus Lifesciences (20 million),Vedanta(20 million) and Bosch ($10 million).

Among stocks facing a weight reduction, Nuvama expects NTPC to see the largest outflows, worth 97 million,followed by Eicher Motors(65 million), Grasim Industries (64 million),REC(45 million), HAL (44 million),Cipla(38 million), GAIL India (36 million),MRF(30 million) and Siemens India ($10 million).

MSCI Smallcap Index rejig

PI Industries, which was removed from the Standard Index, has been added to the Smallcap Index. Other key additions include Shadowfax Technologies, Apollo Micro Systems, HUDCO, Diamond Power Infra, Aequs, Viyash Scientific, E2E Networks, SG Mart, Molbio Diagnostics and Axiscades Technologies.

Coforge has been excluded from the Smallcap Index. Nuvama expects its exclusion to result in outflows worth $97 million. Hindustan Construction, Praj Industries, Arvind Fashions, Ion Exchange (India), Happiest Minds Technologies, India Cements, TTK Prestige, Shakti Pumps, Aditya Birla Fashion and Sandur Manganese and Iron Ores are among the other key exclusions, each expected to see outflows of up to $5 million.

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Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimershere.