Adani Transmission, Adani Total Gas shares may see $200 million outflow on likely MSCI rejig; Kotak Bank, InterGlobe Aviation, Zomato stocks in focus

MSCI Indices are going to announce changes for May in its review on May 12. If one goes by Nuvama Alternative & Quantitative Research, two Adani group shares Adani Transmission and Adani Total Gas shares may see over $200 million in combined outflow on a likely cut in weightages.

As per Nuvama, there are high chances of MSCI increasing weights for Kotak Mahindra Bank Ltd, InterGlobe Aviation Ltd, Zomato and Samvardhana Motherson. Hindustan Aeronautics (HAL) and Power Finance are likely to be included in the MSCI Global Standard Indices while Indus Towers could see an exclusion.

MSCI had on Friday said it would lower the free float percentages of the two Adani Group companies in its upcoming May index review. This is because MSCI now assesses Adani Total Gas' free float at 14 per cent, down from 25 per cent, and Adani Transmission's free float at 10 per cent, also down from 25 per cent. The free float represents the proportion of outstanding shares available for purchase in public equity markets by international investors. If it does, Nuvama estimates $122 million in outflow for Adani Transmission and $84 million in outflow in the case of Adani Total Gas.

The expected inflows in the case HAL is $190 million, Nuvama estimated. It sees PFC to sees $140 million inflows if included. Though there are only borderline chances of its inclusion. There are high chances of Indus Towers exclusion, which could lead to $83 million in outflows.

Adani Transmission, Adani Total Gas shares: Why are these 2 Adani group stocks falling today?
 

Kotak Mahindra Bank's likely weight gain could result in $730 million in inflows. InterGlobe Aviation ($32 million), Samvardhana Motherson ($19 million) and Zomato ($19 million) may also see inflows, Nuvama expected.

Adani Transmission may see $122 million outflow while Adani Total Gas may see 84 million outflows on weight reductions.

To recall, the MSCI May 2023 cut-off date began from April 17 and lasted till April 30.

Going by experience of last 12 reviews, in 95 per cent plus instances the cut off happened in initial three to four days. For instance – Feb 2023 cut off was on first day itself. The announcement will be on May 12th (03:30 IST) and adjustment will take place on May 31.

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