MSCI index rejig may see FII inflows up to $2 billion to India, stock count may rise to 150

Global index solutions provider MSCI is scheduled to rejig its global indices such as MSCI Emerging Market Index from Wednesday, May 15, which could result in FII inflows of around $2 billion, according to reports.

The recent reshuffle, which will become effective from May 31, is likely to see inclusion of around 10 Indian stocks in the MSCI EM index, reports suggest.

The addition may also increase India’s weightage in the index from the current 18% to 20% by the second half of 2024. In early 2020, India’s weight in the MSCI Emerging Market Index was around 8%.

There are around 136 Indian stocks in the index which are likely to reach closer to 150 after the rejig, according to reports.

The additions could attract foreign fund inflows of around $2 billion.

Indus Towers, Phoenix Mills, PB Fintech, Solar Industries India, Sundaram Finance, JSW Energy, NHPC, Jindal Stainless, Bosch, Mankind Pharma, Torrent Power, and Canara Bank are the main contenders for inclusion, according to market observers.

The reports estimate that Indus Tower could see inflows of $224 million and PB Fintech of $223 million while Phoenix Mills at $213 million.

Indus Tower shares rose more than 1.5% to hit a high of ₹333.45 apiece on the NSE. Private steel maker JSW Steel Ltd raced 3.23% to ₹592.95 on the NSE.

Shares of PB Fintech, which owns online platforms like policybazaar and paisabazaar, rallied more than 4% to hit a high of ₹1,301.7 apiece in morning deals.

Mixed use land development company Phoenix Mills Ltd rose by more than 1% to hit a high of ₹3,038.05 following the report.

Experts said that relative underperformance by other EM markets like China, stellar performance by Indian markets and standardised norms for foreign holding are some of the factors that have boosted India’s weightage in the EM space.