Jindal Steel & Power, Adani Power and Tata Elxsi could get included in the MSCI India index, says Edelweiss Alternative & Quantitative Research in a report.
Edelweiss believes that HDFC AMC could be excluded from the index while Indraprastha Gas may have managed to remain in the index.
The MSCI index review announcement is likely on May 13 and the re-balancing could be from May 31.
"Going by our past experience of analysing semi-annual reviews, we believe that the MSCI May 22 SAIR market cap cut-off date has already been selected in the previous week. In the week gone by, we saw immense price volatility in all the potential inclusion names, which led them to trade on and around market-cap cut-off levels, "Edelweiss said in a note.
Edelweiss believe that there would be a possibility of a FIF (Foreign Inclusion Factors) increase in IGL, and if that happens, then the counter could be saved from getting excluded. If MSCI keeps the FIF status quo, then IGL could see an outflow of USD 85mn, it said.
On the other hand, Emkay Global said that the Bank of Baroda, Tata Elxsi, NMDC, Adani Power, and AU Small Finance Bank will end up being included in the MSCI India Standard Index. They anticipate that if these stocks are added to MSCI, they will receive $485 million in inflows.
Analyst at Emkay Global expects that Bank of Baroda will be included in the MSCI India Standard Index. According to the analyst, this addition will result in a 0.16% weightage for the lender in the index and $58 million in inflows.
They also expect Tata Elxsi may see an inflow of $131 million and NMDC may get an inflow of $60 million.
"Adani Power is a low-probability inclusion idea into the MSCI indices." If the stock is included, it may result in 0.37% weightage and $132 million in inflows. Adani Power Ltd. lies on the borderline of the "extreme price increase" threshold while fulfilling other criteria by a good margin, thus making it our low probability inclusion," says Emkay Global.
What is MSCI India Index
The MSCI India Index is designed to measure the performance of the large and mid-cap segments of the Indian market. With 107 constituents, the index covers approximately 85% of the Indian equity universe. The MSCI India Index was launched on January 01, 2001.
The index is based on the MSCI Global Investable Indexes (GIMI) Methodology—a comprehensive and consistent approach to index construction, that allows for meaningful global views and cross-regional comparisons across all market capitalization sizes, sectors and style segments and combinations.