PNB, BHEL, 2 more stocks likely to enter MSCI Global Standard Index in Feb rejig: Nuvama

India's index representation in the MSCI Emerging Market Index could cross 20% by the middle of 2024 from the current 16.9% on current momentum, according to a Nuvama research which sees the entry of four stocks viz. Jindal Stainless, Punjab National Bank (PNB), Bharat Heavy Electricals (BHEL), and Oberoi Realty in the MSCI Global Standard Index as part of the February reorganisation.

Indian headline indices have been on a roll since the beginning of the December series and have been hitting new lifetime highs on a daily basis. On Monday, the Nifty hit yet another lifetime high of 21,026.10 after hitting new highs on four out of five trading sessions, last week. It had ended the previous week with 4% week-on-week gains. The one-month gains stand at 7.85%.

According to Nuvama's estimates the addition of the above stocks is likely to result in combined passive inflows of $567 million. In Jindal's case, it is the highest and estimated at $149 million, followed by $142 million in PNB and $138 million each in BHEL and Oberoi.


However, as a caveat, Nuvama said that these stocks will need to broadly maintain the current price levels as of December 8.

The official announcement of the MSCI rejig is scheduled for February 12 with adjustments taking place on February 29, the report said.

In the event of a 5-10% uptick, Dalmia Bharat, Union Bank of India, Alkem Laboratories, Solar Industries, and FSN-Ecommerce (Nykaa) will likely become probable for making a cut, this report said. The combined inflows from these five stocks are estimated at $644 million.

Meanwhile, NMDC, Bosch, Canara Bank, NHPC and Prestige Estates could enter the index on a 15-18% rally, the report said. Patanjali Foods, GMR Airports Infrastructure and Torrent Power could make a cut on a 30% surge, according to the estimates.

As for the exclusions, Indraprastha Gas and Petronet LNG may see an exit on price correction between 3% and 20%.

Nine new stocks entered the MSCI India Index on November 30 as part of the last rejig. These stocks are IndusInd Bank, Suzlon Energy, Persistent Systems, APL Apollo, Polycab, Macrotech Developers, Tata Motors A, One 97 Communications (Paytm), Tata Communications.

India's representation in the MSCI EM pack held steady at around 8% from 2015 until October 2020. Since November 2020, it has nearly doubled. Nuvama attributes this rise to a slew of triggers including India's standardised Foreign Ownership Limit (FOL), robust performance by Indian equities, particularly in the midcap segment and relative underperformance by other EM packs, especially China.

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