MSCI Weightages Decline: RIL, Infosys, Banks, TCS Brace for Outflows.

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Several prominent companies, including Reliance Industries Ltd, ICICI Bank Ltd, HDFC Bank Ltd, Infosys Ltd, and Tata Consultancy Services, are set to experience changes in their market status due to alterations in MSCI weightages. These modifications may lead to potential outflows of up to $130 million from these stocks, with PI Industries standing out as it could attract around $16 million in inflows. The adjustments are scheduled to take effect at the close of August 31.

Reliance Industries might face up to $130 million in outflows, followed by ICICI Bank with an anticipated $78 million and Infosys at approximately $77 million. HDFC Bank and TCS could also see significant outflows, both exceeding $50 million. Other stocks like Axis Bank, Kotak Mahindra Bank, Bajaj Finance, Bharti Airtel, Larsen & Toubro, Wipro, Mahindra & Mahindra, ITC, and Maruti Suzuki are also predicted to experience outflows.

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In addition to these changes, MSCI has introduced and removed a few stocks from its MSCI Global Standard indices. Notably, Power Finance Corporation Ltd (PFC), REC Ltd, Ashok Leyland Ltd, and five other stocks have been added. These changes are projected to result in inflows ranging from $150-200 million for the mentioned stocks.

The list of inclusions features Cummins India, HDFC Asset Management, IDFC First Bank, Supreme Industries, and Astral Ltd. ACC, which belongs to the Adani group, is the only stock excluded from the list, potentially experiencing outflows of around $75 million.

Abhilash Pagaria, Head of Nuvama Alternative & Quantitative Research, shared insights into these adjustments, stating, “Eight inclusions were announced, aligning with our projections for six of them. However, two unexpected entries, REC & Supreme Industries, emerged as surprises. These stocks were strong contenders for the November 23 review, and it’s worth noting that they were selected via the NOC route, which is one of the highest seen in my experience.”

Furthermore, MSCI has introduced changes to its MSCI Global Small Cap indices, involving 40 additions and 11 exclusions from the MSCI India list. The list of inclusions encompasses names such as Mishra Dhatu Nigam, PTC Industries, Glenmark Life Sciences, Five Star Business Finance, Anant Raj, CPCL, Ather Industries, Ami Organics, Marksans Pharma, Newgen Software, and Patel Engineering, among others.

Exclusions from the index comprise Tata Communications, Aditya Birla Capital, Ashok Leyland, IDFC First Bank, REC, NIIT, BEML Land Asset, and Astral, among others. These developments highlight the dynamic nature of the market and the ongoing adjustments to investment portfolios.

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