 "An upward trajectory: In absence of black swans, markets may rise further bullish market upward")
MSCI, the global index aggregator, is set to rebalance its indices on May 15, with India set to witness the inclusion of more than 10 stocks. The move is expected to usher in approximately $2 billion in passive Foreign Institutional Investor (FII) inflows by May 31, as projected by Nuvama Alternative and Quantitative Research.
As of May 13, 2024, India's weight in the MSCI Emerging Market Index stood at around 18 per cent, a considerable rise from approximately 8 per cent in early 2020.
"We maintain our conviction that India's rise within the EM landscape will continue to surprise sceptics and reward proponents of the India Story. Currently, India has 136 stocks included in the MSCI Standard Index/EM Index, and we foresee this number nearing 150 following the upcoming May review," said Nuvama in a note.
Nuvama's projections for the MSCI Standard index include the inclusion of Indus Towers, Policy Bazaar, Phoenix Mills, Sundaram Finance, Solar Industries India, NHPC, Bosch, Jindal Stainless, Torrent Power, Mankind Pharma, JSW Energy, and Canara Bank. Conversely, it expects One 97 Communications (Paytm), Berger Paints, and Indraprastha Gas to be excluded, while Thermax remains on the cusp.
In the MSCI SmallCap index, Nuvama predicts the inclusion of Waaree Renewable, Vedant Fashions, Va Tech Wabag, RR Kabel Ltd, Sanghvi Movers, Doms Industries, Time Technoplast, Dynamatic Tech, Inox India Ltd, Transformers & Rectifiers, Puravankara, Juniper Hotels, and Tips Industries.
Meanwhile, it anticipates Tatva Chintan, Borosil Ltd, Rajratan Global, Sharda Cropchem, and Dreamfolks Services to be excluded.
Nuvama stressed that with consistent flows from Domestic Institutional Investors (DII) and potential resumption of steady Foreign Institutional Investor (FII) participation, India could surpass a 20 per cent weightage in the MSCI EM Index by the second half of 2024.
