MSCI India weightage to go up

Quarterly revision of index due on May 12

Morgan Stanley Capital International (MSCI), the most widely followed index used by fund managers and institutions, is slated to announce the next quarterly revision in its indices for various markets including India on May 12.

An equity analyst with a domestic broking firm tracking the MSCI index said inclusion of a large cap company such as Bharti Tele-Ventures could increase India's weightage in MSCI Asia by 60 basis points.

India's current weightage in the MSCI Asia index is around 7.7 per cent. However, the weightage would vary, depending on how indices of other countries in Asia are revised.

The total free float market capitalisation of MSCI India index is currently at Rs 2,67,088.1 crore.

Following the inclusion of a company such as Bharti Tele-Ventures, with a free float market capitalisation of Rs 21,650 crore, India's weightage in MSCI Asia can go up to 8.3 per cent, with total free-float market capitalisation of MSCI India index becoming Rs 2,88,738.1 crore.

Infosys Technologies tops the chart in MSCI India index, commanding a weightage of 13.3 per cent, followed by Reliance Industries at 11.9 per cent, ICICI Bank at 6.5 per cent, ONGC at 5.4 per cent and HDFC 5.1 per cent.

Depending on the free-float market capitalisation of the companies listed on Indian bourses and inclusion of a new security will change the free float of securities in MSCI India and, consequently, its weightage in MSCI Asia index would go up.

Beside Bharti Tele-Ventures, the recently listed NTPC too could be included in the MSCI India index. "An increased weightage in MSCI Asia may help India get more FII money," a broker pointed out.

The flow of FII money into a country depends on its weightage in the regional indices.