MSCI India rebalancing to stoke FPI inflows to the tune of Rs 1,900 cr

Domestic equities are expected to see inflows to the tune of $250 million (Rs 1,900 crore) on account of the semi-annual rebalancing of the MSCI India Index, which is tracked by funds worth $14 billion (Rs 1 trillon), according to domestic brokerage Emkay Global. The rebalancing is scheduled to take place on May 12, and the changes will become effective from June 1.

According to the brokerage, Tata Consumer, Torrent Pharma, Jubliant Food, and Biocon are key inclusion candidates. These stocks are expected to see inflows in the range between $50 million (Rs 380 crore) and $85 million (Rs 640 crore).

Domestically-listed stocks with market capitalisation of $2.5 billion (Rs 19,000 crore) as on April 24 will be considered in the rebalancing.

 

 

Bharti Infratel, Shriram Transport, M&M Financial and Tata Power are likely to be excluded from the MSCI India Index, according to the analysis done by Emkay. These stocks will see foreign investor selling between $18 million (Rs 135 crore) and $27 million (Rs 200 crore).

“Bharti Infratel and Shriram Transport are expected to be excluded in the following rebalance since their foreign investment headroom is below 15 per cent,” said Emkay.

In the rejib next month, MSCI will not alter India’s foreign ownership limit (FOL). India’s FOL is expected to go up — resulting in higher weightage in global indices —after the government increases foreign portfolio investor (FPI) investment limit to the sectoral limit.

MSCI said the call on increasing FOL will be taken in August.