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Business News/ Markets / Stock Markets/  MSCI index rejig from Aug 31: REC, Supreme Industries, 6 others included; What's expected in Nov review?
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MSCI index rejig from Aug 31: REC, Supreme Industries, 6 others included; What's expected in Nov review?

Shares of IDFC First Bank, HDFC AMC, Ashok Leyland, and Supreme Industries are among the eight stocks that will see inflows from passive funds, as they make their way into MSCI Global Standard Index starting from today (August 31, 2023)

IDFC First Bank, HDFC AMC, Ashok Leyland and Supreme Industries are among the eight stocks that will see passive inflowsPremium
IDFC First Bank, HDFC AMC, Ashok Leyland and Supreme Industries are among the eight stocks that will see passive inflows

MSCI Global Standard Index's latest rejig came into effect from Thursday, August 31, where a total of eight stocks were included and one was excluded. Shares of IDFC First Bank, Power Finance Corporation (PFC), HDFC Asset Management Company (AMC), Ashok Leyland, Supreme Industries, Astral, REC, and Cummins India made their way into MSCI Global Standard Index on August 31. On the other hand, ACC was excluded from the index.

According to Nuvama Alternative & Quantitative Research said in its report, ‘’A total of eight inclusions have been announced, aligning with our projections for six of them. However, two unexpected entries (REC & Supreme Industries) emerged as surprises.''

‘’In our assessment, these were strong contenders for the November 23 review. It's worth noting that the aforementioned stocks were selected via the NOC route as this time India got six NOC slots which is one of the highest seen in my experience,'' said Nuvama in its latest update.

Index provider MSCI had formally disclosed the changes for the August 23 review ealier this month. The adjustments are to take place in the closing hours of today's trading session, according to analysts at Nuvama Alternative & Quantitative Research.

On August 31, shares of Supreme Industries settled 1.03 per cent higher at 4,447.95 apiece on the BSE, while HDFC AMC shares closed 1.02 per cent higher at 2,519.80 apiece on the BSE. 

On the other hand, PFC declined 4.58 per cent to settle at 260.30 apiece on the BSE, while REC too closed 2.85 per cent lower at 238.25 apiece on the BSE,

MSCI index rejig: What's expected in November review?

Turning to potential candidates for the MSCI standard index November review, Nuvama said that Polycab is the current qualifying stock.

Roughly, a 15 per cent plus move is needed until mid-October for Macrotech Developers (CMP 692) and One97 Communications - the operator of Paytm (CMP 858) to qualify. The required move depends on the revised float considered by MSCI. If the float moves up by 10, less than 10 per cent is needed, and if it moves up by 5, a 20 per cent up-move is needed. Nuvama is awaiting details on its revised float.

Tata Communications (CMP 1,673) – As per today’s announcement in the August review, the stock is slated for exclusion from the MSCI small cap index. However, a substantial surge of approximately 15 per cent to 20 per cent would position the stock for direct inclusion in the MSCI standard index for the November 23 review, according to Nuvama.

A 25 per cent plus move is needed for APL Apollo Tubes Ltd (CMP 1,565) and Schaeffler India (CMP 3,015). For Nykaa (CMP 144), the required move depends on the revised float considered by MSCI. If the float moves up by 5, around a 25 per cent move is needed, according to Nuvama.

The inclusion of IndusInd Bank in the November review will depend on foreign instittional investors' (FII) holdings. If foreign room increases by 1.5 per cent in the current quarter, then the stock can make the cut, said Nuvama.

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ABOUT THE AUTHOR
Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at nikita.prasad@htdigital.in.
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Published: 31 Aug 2023, 10:10 PM IST
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