MSCI India review may bring $2.3 billion inflows, add up to 12 stocks
Adani Green, Adani Energy Solutions and Groww are among the likely entrants, while Astral and SBI Cards face possible exclusion in MSCI's August index review
 "MSCI India review may bring $2.3 billion inflows, add up to 12 stocks")
The upcoming rebalancing of the MSCI India Standard Index could drive estimated passive inflows of about $2.3 billion into Indian equities, with as many as 12 inclusions and three exclusions likely in the August review cycle, according to a report by JM Financial Research.
Among potential entrants, Adani Green Energy, Adani Energy Solutions, and investment platform Groww (Billionbrains Garage Ventures) have emerged as high-probability candidates for fresh inclusion.
The brokerage estimates that Groww’s addition to the index could bring estimate passive flow of $821 million while the same for Adani Green is estimated to be around $773 million.
Ather Energy is seen as a medium-probability contender, contingent on further improvement in its free-float adjusted capex during the observation period.
The changes, scheduled to be announced on August 12 after market hours and implemented from August 31, are expected to significantly alter index composition and trigger fund flows from global passive investors tracking MSCI benchmarks.
In addition, the brokerage identified Laurus Labs and Biocon as strong candidates for migration from the MSCI Small Cap Index to the Standard Index in the August review.
The migration could bring passive inflows of $554 million in Laurus Labs and $285 million in Biocon.
Mid-tier IT firm Coforge falls under the medium probability for migration, estimated to have inflow of $567 million, if migrated.
On the other hand, Astral is seen as a high-probability exclusion from the index, while SBI Cards and Payment Services is classified as a medium-probability removal.
The exclusion of SBI Cards could result in an outflow exceeding $140 million while the same from Astral could be around $138 million, as per the estimates.
Balkrishna Industries could also face a low-probability exit.
India currently has around 165 constituents in the MSCI India Standard Index with a total market capitalisation of approximately $3.2 trillion.
Market participants typically track MSCI index reviews closely, as changes tend to result in significant trading volumes and short-term price movements in affected stocks, driven largely by passive fund adjustments.