Paytm, Canara Bank among 26 stocks in focus ahead of MSCI rejig on May 15
MSCI's reshuffle on May 15 may eject Paytm from the MSCI Global Standard index, potentially attracting $2 billion from passive funds. Nuvama estimates 12 stocks to join, with inflows ranging from $144 million to $224 million each.
In what could lead to an inflow of around $2 billion from passive funds tracking emerging market () indices, global index services provider MSCI will announce a reshuffle in its indices on May 15 in which may be thrown out of the MSCI Global Standard index.According to estimates done by Alternative & Quantitative Research, at least 12 could be included in MSCI Global Standard Index. The list includes , , , , Solar Industries, NHPC, Bosch, Jindal Stainless, Torrent Power, Mankind Pharma, JSW Energy and . Each of these stocks are expected to witness inflows varying between $144 million and $224 million.
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On the other hand, Nuvama believes that Paytm, Berger Paints and IGL may see exclusions from the index.
Besides MSCI Smallcap Index is likely to see addition of 14 like Waaree Renewable Tech, Vedant Fashions, VA Tech Wabag, RR Kabel, Sanghvi Movers, DOMS Industries, Time Technoplast, Dynamatic Tech, Inox India, Transformers and Rectifiers, Puravankara, Juniper Hotels, Tips Industries and Shriram Pistons.
At the same time, smallcaps like Tatva Chintan, Borosil, Rajratan Global, Sharda Cropchem and Dreamfolks may see exits. The pre-emptive price action in most of the names are already factored in.
"We maintain our belief that in the EM pack will continue to astound skeptics and reward believers in the India Story. As of now, India's stock count in the MSCI Standard Index/EM Index is 136, and we anticipate it to reach closer to 150 by the forthcoming May review," said Nuvama's Abhilash Pagaria.
In the , India's representation has grown from around 8% in October 2020 to around 18% now on the back of India's standardized Foreign Ownership Limit (FOL) in 2020, robust performance by Indian equities and relative underperformance by other EM packs, especially China.
"With a consistent flow from DII and now if steady resumes, there is potential for India to surpass a 20% weightage in the MSCI EM Index by the second half of 2024 itself," Nuvama said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Source: Stocks-Markets-Economic Times
