Shares of Reliance Industries Ltd, ICICI Bank Ltd, Adani Green Energy Ltd, Adani Power Ltd, Infosys and Bharti Airtel Ltd, among others, are likely to see strong ouflows on weight adjustments, following the rejig in the MSCI Global Standard index.
In the case of Reliance Industries, the counter could see $198 million outflows on weight reduction. ICICI Bank could see $166 million outflows, followed by Infosys ($148 million), Bharti Airtel ($105 million) and Tata Consultancy Services ($92 million).
Adani Green Energy may see $173 million outflows, while another Adani group counter Adani Power may see $111 million outflows.
"From the conviction list, only Adani Energy Solutions Ltd did not make the cut. MSCI provided a detailed explanation for not considering the stock, citing low confidence about the stock's free float. Additionally, MSCI has reduced the float in two other entities," Nuvama noted.
Meanwhile, GMR Airports Infrastructure Ltd may also see $116 million outflows.
On the flip side, HDFC Bank Ltd is all set to see a massive $1.9 billion passive inflows, while shares of Voltas Ltd, BSE Ltd, Kalyan Jewellers India Ltd, Oberoi Ltd and Alkem Laboratories Ltd are also expected to see strong inflows in excess of $200 million each on MSCI rejig in the MSCI Global Standard index.
Net-net, the adjustments which would take place on November 25, may result in net passive inflows of $2.5 billion. With five inclusions and no exclusions, the net stock count post-rejig will be 156 for India in the MSCI Standard/EM Index.
"Additionally, there will be a net inclusion of 13 stocks in the Smallcap Index, bringing India's total stock count in the small-cap index to 525," Nuvama said.
The MSCI rejig would mean India's representation in the MSCI EM Index is set to increase from the current 19.3 per cent to closer to 19.8 per cent. This increase in weight, in terms of basis points, is the highest among any EM Index in this rejig.
At present, the highest representation in the MSCI EM Index is China, with a weight of 27 oer cent and 598 members in the index, compared to India's 19.3 per cent weight with 151 stocks.
There is enormous potential for far more additions to happen for India, said Abhilash Pagaria, Head, Nuvama Alternative and Quantitative Research.
"I remain extremely bullish on India, especially with active participation from Mutual Funds and HNI/Retailers in the Indian Equity Markets. We should anticipate many more inclusions in the EM Index. We are still at the tip of the iceberg," he said.