MSCI August rejig today: Indian stock market likely to see $5.5 billion inflows; HDFC Bank shares up on weight increase

MSCI is set to rebalance its indices on Friday which is estimated to lead to net inflows worth $5.5 billion into the Indian stock market. MSCI August rebalancing was announced on August 13 and the adjustments will take place as of the close of August 30.

A total of seven stocks are included in the MSCI Global Standard index, while one is excluded. Moreover, Morgan Stanley Capital International (MSCI) said it will also increase the weight of HDFC Bank in the index

According to IIFL Alternative Research, MSCI August 2024 review will lead to net inflows worth $5.5 billion in the Indian equities. With the changes being implemented today, India’s weightage in the MSCI emerging market (EM) index is likely to rise to a record 20% from 19.4% now.

Among the seven stocks to be included, Dixon Technologies is set to receive the maximum passive inflows worth $257 million, followed by Vodafone Idea at $254 million, according to estimates by IIFL Alternative Research.

Zydus Lifesciences and Oil India will get inflows of a little more than $200 million each, while Rail Vikas Nigam Ltd (RVNL) may see passive inflows worth $180 million, Prestige Estates Projects at $160 million, and Oracle Financial Services at $152 million.

Meanwhile, the increase in the weightage of HDFC Bank shares in the MSCI indices will take place in two tranches. The first one will happen after today’s rebalancing, while the second will take place after the November review, provided the foreign headroom remains at least 20%.

HDFC Bank is likely to attract inflows worth $1.5 billion after the August round of weightage increase, according to Nuvama estimates.

MSCI also announced the removal of the restrictions in the treatment of Adani Group stocks.

MSCI Smallcap Index

MSCI India Domestic Smallcap Index has also seen inclusion of 25 stocks, including Aurionpro Solutions, Bajaj Hindusthan Sugar, Inox Green Energy Services, Inox Wind Energy, Max Estates, and others. Eight stocks, including Cochin Shipyard, PB Fintech, Phoenix Mills, RVNL, IREDA, among others have been removed.

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