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Adani Power, Jindal Steel & Power to be added to MSCI India index, HDFC AMC removed; $566 mn inflows expected

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MSCI (Morgan Stanley Capital International) has added Adani Power, Jindal Steel & Power, AU Small Finance Bank, and Tata Elxsi to the MSCI India Index after the semi-annual review 2022. Additionally, HDFC Asset Management Company will be booted out from the index. The move is largely in line with expectations pinned by analysts earlier. According to estimates by Edelweiss Alternative Research, the addition of the stocks to MSCI Indices could result in inflows worth $566 million. MSCI reviews its global and domestic indices semi-annually based on various factors. 

  • Adani Power has been added to the index which could result in inflows worth around $150 million, according to a note by Edelweiss Alternative Research. Analysts at Emkay Global, earlier, had said that Adani Power’s inclusion was ‘low probability’. However, if added, the stock may result in 0.37% weightage and $132 million in inflows, they had said.
  • Jindal Steel & Power’s addition to the index may result in inflows worth $150 million, based on estimates pinned by Edelweiss.
  • Tata Elxsi stock addition to the MSCI India index will result in inflows worth $188 million, according to Edelweiss while Emkay Global expects inflows worth $131 million.
  • The inclusion of AU Small Finance Bank may result in inflows worth $78 million, Edelweiss said.
  • HDFC AMC’s exclusion from the index may result in $78 million outflows, Edelweiss has projected.

Global small-cap index rejigged

MSCI has also made changes to its MSCI Global Small Cap Indexes. Here, 44 Indian stocks have been added at the expense of 14 stocks that have been ousted. Among marquee names that will be added are Easy Trip Planners, Go Fashion India, Lemon Tree Hotels, Mahindra Lifespace Developers, Sapphire Foods, Usha Martin, Transport Corporation of India, PB Fintech, and Raymond.

Stocks that will be removed from the index include Bajaj Consumer care, L&T Technology Services, Solara Active Pharmaceutical, Varun Beverages, and Future Retail, among others.

Domestic index changes

Further, MSCI has also rejigged its domestic India index, where 3 securities have been added while deleting 4. Bank of Baroda, Cholamandalam Investment and Finance Company, and Jindal Steel & Power have been added to the index. On the other hand, HDFC AMC, Indraprastha Gas, MRF, and Shriram Transport Finance have been excluded. 

MSCI India Domestic Small Cap Index will also see the addition of 50 new stocks from the market closing on May 31, 2022. 10 stocks will be removed. 

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