MSCI Feb rejig: Aditya Birla Capital, L&T Finance added; IRCTC excluded

MSCI has announced its latest index rebalancing, set to take effect on February 27, 2026. According to an official statement, Aditya Birla Capital and L&T Finance will be added to the MSCI Standard Index, while Indian Railway Catering and Tourism Corporation (IRCTC) will be removed.  Furthermore, AU Small Finance Bank is slated for a weightage increase following a float adjustment. Despite these changes, India’s overall representation in the MSCI Standard Index remains steady at 14.1 per cent, though the total number of Indian constituents will rise to 165 from 164, according to Nuvama Alternative & Quantitative Research.

 

The inclusions follow a period of significant outperformance. Over the past year, Aditya Birla Capital and L&T Finance have surged 111 per cent and 100 per cent, respectively, far outstripping the Nifty50’s 10.9 per cent gain. In contrast, AU Small Finance Bank rose 73 per cent, while IRCTC shares declined 19 per cent during the same period.

 

Estimated inflows and outflows

According to projections from Nuvama, the reshuffle will trigger significant capital movement:

• Aditya Birla Capital: Estimated inflows of $257 million
• L&T Finance: Estimated inflows of $238 million
• AU Small Finance Bank: Estimated inflows of $172 million (due to weight increase)
• IRCTC: Estimated outflows of $141.6 million

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Smallcap index adjustments

The MSCI Smallcap Index will also undergo a substantial overhaul, with over a dozen Indian stocks being removed. This will reduce the total Indian stock count in the Smallcap index to 480 from 508.

 

Several stocks will face outflow due to exclusion, including Gokaldas Exports ($8.2 million), Sterlite Technologies ($5.8 million), KNR Constructions and J Kumar Infraprojects ($3.8 million each), VRL Logistics and Ashoka Buildcon ($3.5 million each), Anup Engineering ($3.4 million), Rajesh Exports ($2.7 million), and Heritage Foods, Shoppers Stop, Keystone Realtors, and Dhanuka Agritech ($2.6 million each), followed by Dilip Buildcon ($2.5 million).

 

In contrast, new entrants to the Smallcap Index expected to see inflows include Premier Energies ($15 million), National Securities Depository ($8 million), Emcure Pharmaceuticals ($7 million), JSW Cement ($6 million), Ashapura Minechem ($5 million), Canara HSBC Life Insurance ($5 million), and Thyrocare Technologies ($4 million).

Previous review highlights

In the preceding November review, Fortis Healthcare, GE Vernova, One 97 Communications (Paytm), and Siemens Energy were added to the Global Standard Index, while Container Corp and Tata Elxsi were removed.  Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.