Stocks such as Indus Towers Ltd, Sundaram Finance Ltd, Solar Industries India Ltd, Mankind Pharma Ltd, Jindal Stainless Ltd and Torrent Power Ltd are likely to be included in MSCI Global Standard index when the index aggregator announces the outcome of its May rejig. The cut off date will kick off on April 17 and the announcement is likely on May 13. Adjustments, if any, will be made on May 31. One 97 Communications Ltd (Paytm) could be a potential exclusion, Nuvama said in its latest note.
Abhilash Pagaria, Head at Nuvama Alternative & Quantitative Research said: "Based on my experience, the cut-off typically occurs in the initial phase. The official announcement is slated for May 13 (IST) , with adjustments by passive indices scheduled for May 31," he said.
Among the stocks that have already met the MSCI criteria, included Indus Towers, which could see $189 million in passive inflows, if added to the global index. Sundaram Finance could see $174 million inflows while Solar Industries India may attract $164 million inflows.
Mankind Pharma ($159 million), Jindal Stainless ($158 million), Torrent Pharma ($157 million), NHPC ($160 million) and Bosch ($153 million) could be some of the high probables that may see over $150 million in passive inflows if included in the MSCI index.
"In the case of Indus Tower and Mankind Pharma, this quarter witnessed exits from strategic investors, leading to a higher float. Both companies are required to report their March 24 shareholdings before April 17 for revised float," Pagaria said.
Canara Bank, Zydus Lifesciences, Oracle Financial and Oberoi Realty could be four other stocks that may see MSCI inclusion and attract over $100 million in passive inflows.
Meanwhile, Paytm could be excluded. If it does, $74 million outflow is likely. Given that the cut-off period is still a few weeks away, and with fluctuating prices in both Indian and global markets, the market-cap thresholds are subject to change. It's imperative to closely monitor borderline names and stocks under consideration, Nuvama noted.
As of March 31, India's weight in the MSCI Emerging Market Index stood at 17.7 per ecnt, a significant jump from 8 per ecnt in early 2020. By the second half of 2024, Nuvama anticipates crossing of the 20 per cent threshold in the EM Index.
"At Nuvama Alternative, we maintain our belief that India's ascent in the EM pack will continue to astound sceptics and reward believers in the India Story," it said.