MSCI Adds Five Indian Companies to Global Standard Index

By Bharath Rajeswaran

(Reuters) – MSCI added five Indian companies to its Global Standard Index late Wednesday. According to brokerage Nuvama, this change will increase India's weight on the index to 20%, narrowing the gap with China.

MSCI noted that there are now 156 Indian stocks in the index, which is just one-fourth of China's 598, indicating potential for further Indian stock inclusion.

The updates will take effect after the markets close on Nov. 25. This inclusion raises India's weight in the index to a record 19.8%, up from 19.3%, while China's weight decreases to 26.8% from 27%, according to estimates by Nuvama Alternative and Quantitative Research.

This adjustment is expected to attract approximately $2.5 billion in passive inflows into India's equity markets, as reported by Nuvama.

As it stands, China holds the highest weight in the MSCI Global Standard Index, while India has secured second place since the end of 2021.

The companies added to the index include:
– Voltas (NS:VOLT)
– Oberoi Realty (NS:OEBO)
– BSE (Bombay Stock Exchange)
– Kalyan Jewellers
– Alkem Laboratories

After the last MSCI rebalancing in August, which included seven stocks, Indian markets experienced inflows of about $3 billion into equities.

"We remain extremely bullish on India, especially with active participation from mutual funds and high net worth individuals (HNIs)/retail investors, and anticipate many more inclusions in the emerging markets index," stated Abhilash Pagaria, head of Nuvama research.

Furthermore, seven existing stocks, including top private lender HDFC Bank and Tata Power, saw an increase in their weightage. HDFC Bank is now the highest-weighted Indian stock in MSCI indices at 7.08%, overtaking Reliance Industries (NS:RELI) at 6.08%.

As of November, no Indian companies have been removed from the MSCI Global Standard Index. Additionally, around 13 firms, including Eureka Forbes (BO:EURK), Indegene, and PC Jeweller, were added to the MSCI Small Cap Index, raising the total number of small-cap stocks to 525.