MSCI Rejig: Nuvama Expects $1.18 Billion Inflows Into India From Six New Stocks
India's weight in the MSCI Emerging Market now stands at 19.2% and should gradually cross the 20% mark, Nuvama said
The August review of the MSCI Standard Index could attract about $1.18 billion of inflows into the country through the inclusion of six companies, including Vodafone Idea Ltd., Prestige Estates Ltd., and Oberoi Realty Ltd., according to Nuvama Institutional Equities.
The August review continues to be action-packed, the brokerage said. The official announcement will be on Aug. 13, with the adjustment taking place on Aug. 30.
India's weight in th[e MSCI Emerging Market now stands at 19.2% and should gradually cross the 20% mark, the note said.
Stocks that have made the cut—Vodafone Idea, Prestige Estate, Oberoi Realty, Schaeffler India, Dixon Technology, and Uno Minda — could bring in a potential inflow of $1.18 billion, the research firm said.
Stocks on radar for inclusion include Rail Vikas Nigam Ltd., Zydus Lifescience Ltd., Oracle Financial Ltd., and Oil India Ltd., among others. The seven on-the-radar stocks could bring in a total inflow of $1 billion, the research firm said.
In order to make the cutoff, a 10% to 35% jump is required by June 29, 2024, closing, the brokerage said.
HDFC Bank remains in the spotlight as the eagerly awaited June 2024 shareholding data is expected by the first week of July, the note said. The critical number to monitor is the FII holding dropping below the 55% mark, the note said.
If the shareholding favours a weight increase, which has a higher probability, the stock could see a further 10-15% jump until the official announcement in August, Nuvama said. "In case of an unfavourable outcome, the stock could cool off to around 1,600, at which point we could see good interest from domestic funds."
Currently, foreign portfolio investors have a 47.81% stake in the private lender in categories I and II, according to the BSE. Foreign institutional investors own 0.02% of the bank, whereas foreign companies own 0.42%.