RVNL, Vodafone Idea, Dixon, OIL shares to see huge inflows on MSCI India inclusion

Rail Vikas Nigam Ltd (RVNL), Vodafone Idea Ltd, Zydus Lifesciences Ltd and Oil India are among seven stocks that have been included in the MSCI India domestic index in the August rebalancing. The other three are Prestige Estates, Dixon Technologies and Oracle Financial Services. In a brief note, MSCI said changes in constituents for the MSCI India Index will take place as of the close of August 30, 2024. Analysts estimate India to receive up to $3 billion in net passive inflows following the MSCI August rebalancing. 

If one were to go by initial Nuvama estimates, some of these seven stocks are likely to see up to $281 million in passive flows.

As per Nuvama, Dixon Technologies may see passive inflows of $281 million, which is 2 roughly million Dixon shares. Vodafone Idea is expected to garner $278 million in passive inflows, roughly 1,450 million shares. Oil India is seen attracting $238 million inflows, while Zydus Lifesciences could attract $230 million inflows. RVNL would be another stock to attract over $200 million in inflows. This railway stock is seen attracting $219 million inflows. 

Other two stocks in the list included Prestige Estate Project ($181 million inflows likely) and Oracle Financial Services Software ($170 million). Bandhan Bank may see $170 million outflows on index exit. 

Besides, MSCI said it would include eight stocks in MSCI India Domestic index. They included Bosch, Dixon Technologies, Oil India, PB Fintech, Phoenix Mills, RVNL, Vodafone Idea and Zydus Lifesciences.

"With all the adjustments in the EM Pack, India’s tentative weight will remain close to 20%. India should witness net FII passive inflow of $2.7 billion to $3 billion. Given the current pace and momentum, India could potentially cross 22 per cent by year-end," Nuvama Alternative & Quantitative Research said.

Meanwhile, MSCI added 25 stocks to MSCI India Domestic Smallcap index. They include Inox Green Energy Services, Inox Wind Energy, Shakti Pumps India, TVS Supply Chain, Welspun Enterprises and Senco Gold. Others included Bajaj Hindustan Sugar, Aditya Vision, Paras Defence, Gulf Gulf Oil Lubricant India and Sharda Motor Industries among others. Cochin Shipyard, Jaiprakash Associates and network 18 Media have been included from the list. 

MSCI added 27 stocks and said a total of 96 securities will be deleted from the MSCI ACWI Index. The three largest additions to the MSCI World Index measured by full company market capitalisation will be Galderma Group (Switzerland), Zealand Pharma (Denmark) and Addtech B (Sweden), it said.

"The three largest additions to the MSCI Emerging Markets Index measured by full company market capitalization will be Nu Holdings A (Brazil), Huaneng Lancang River Hydropower A (HK-C) (China) and Adnoc Drilling Company (United Arab Emirates)," it added.

IMSCI said in  light of currently observed market accessibility issues, it will continue to not implement changes as part of this index review for any securities classified in Bangladesh for the MSCI Bangladesh Indexes or impacted composite indices.