MSCI or Morgan Stanley Capital International, an investment research firm best known for its benchmark indexes, has raised India’s weightage in its Global Standard index to an all-time high of 18.2% in its February review. This could lead to inflows of around $1.2 billion as the weightage has nearly doubled since November 2020, reports Reuters.
India now has the second highest weightage after China due to the sustained rally in Indian equities and the underperformance of other emerging markets such as China. Consistent domestic inflows and foreign investments could see India’s weight surpass 20% by early 2024.
In the latest review, MSCI added 5 Indian stocks to the Global Standard index including state-owned lenders PNB and Union Bank of India in the large-cap category. BHEL and NMDC were added to the mid-cap index, while GMR Airports moved from small-cap to mid-cap.
According to estimates, the February review could bring in around $1.2 billion of passive foreign inflows into India. Tata Motors and Macrotech Developers were added to the large-cap category. PNB, Canara Bank and Embassy Office Park REIT were added to the mid-caps.
BHEL, Persistent Systems, MRF, Suzlon Energy and Cummins India graduated from small-cap to mid-cap. Around 27 small-cap stocks were also added while 6 were removed or re-categorized.
MSCI’s increased weightage and additions of Indian stocks in its latest review reflects the country’s equity rally and could lead to significant foreign inflows.
