IREDA, JP Associates, MSTC, KPI Green Energy, DB Realty shares in focus after MSCI rejig
MSCI rejig: A few smallcap stocks, whose weights have gone up, such as Glaxosmithkline Pharma, Fine Organic Industries, PTC Industries and Suven Pharmaceuticals, among others, are expected to see negligible inflows.
SUMMARY
- IREDA shares are expected to see $17 million inflows. Swan Energy may attract $7 million inflows.
- PTC Industries and Suven Pharmaceuticals, among others, are expected to see negligible inflows.
- MSTC, DB Realty among domestic stocks that have been added to the MSCI Smallcap index.
Indian Renewable Energy Development Agency Ltd (IREDA), Swan Energy Ltd, Cello World, Jaiprakash Associates Ltd (JP Associates), KPI Green Energy Ltd, MSTC Ltd, DB Realty Ltd and SpiceJet Ltd are among domestic stocks that have been added to the MSCI Smallcap index in the February review, with adjustments likely from February 29. These smallcap stocks are seen attracting up to $17 million in passive inflows due to the MSCI rejig. In total, India is seen attracting a total $1.2 billion passive inflows, as per Nuvama Alternative & Quantitative Research.
In the smallcap space, IREDA shares are expected to see $17 million inflows. Swan Energy may attract $7 million inflows, Honasa Consumer $6 million and JP Associates $5 million. A few smallcap stocks, whose weights have gone up, such as Glaxosmithkline Pharma, Fine Organic Industries, PTC Industries and Suven Pharmaceuticals, among others, are expected to see negligible inflows.
Five stocks Punjab National Bank (Ltd), GMR Airports Infra, Bharat Heavy Electricals Ltd (BHEL), NMDC Ltd and Union Bank of India are likely to attract a combined $816 million in passive inflows following the inclusion in MSCI Global Standard Index, Nuvama Alternative & Quantitative Research said. Weightages were raised for Zomato Ltd, DLF Ltd, MRF Ltd, Hindalco Industries Ltd, Interglobe Aviation Ltd, Hero MotoCorp Ltd and One 97 Communications Ltd (Paytm), among others.
Nuvama said GMR Airports was a surprise entry for February, having been its high conviction entrant candidate but for the May 2024 review.
“The Smallcap Index predictions have also proven to be above 98 per cent-plus accurate. The index provider has set the global cutoff at Day 1, which was January 18th. According to calculations by Nuvama Alternative & Quantitative Research math, India could witness upwards of $1.2 billion FII passive inflow (Std + Smallcap Index),” it said.
At present, India held approximately 17.9 per cent representation in the MSCI EM Index. Following the February rejig, the weight will increase to over 18.2 per cent, marking a historic high.
MSCI Global SmallCap Index Potential Inclusion
| Stock | Exp Flow (In $ million) | Million Shares |
|---|---|---|
| IREDA | 12 | 8 |
| Cello World | 7 | 1 |
| Honasa Consumer | 5 | 1 |
| Jaiprakash Associates | 5 | 17 |
| RR Kabel | 5 | 0 |
| Signatureglobal | 5 | 0 |
| ITD Cementation | 4 | 1 |
| Paisalo Digital | 4 | 3 |
| Rattanindia Power | 3 | 21 |
| KPI Green Energy | 3 | 0 |
| Swan Energy | 3 | 0 |
| MSTC | 3 | 0 |
| Protean eGov Tec | 3 | 0 |
| Ethos | 3 | 0 |
| J.Kumar Infraprojects | 3 | 0 |
| DB Realty | 3 | 1 |
| SBFC Finance | 3 | 2 |
| Sandur Manganese | 3 | 0 |
| IIFL Securities | 3 | 1 |
| Aurionpro Solution | 2 | 0 |
| Dhanuka Agritech | 2 | 0 |
| Balmer Lawrie | 2 | 1 |
| Netweb Technolgies | 2 | 0 |
| Inox Wind | 2 | 0 |
| Kesoram Industries | 2 | 1 |
| Fedbank Financials | 2 | 1 |
| Spicejet | 2 | 2 |
| Hemisphere Prope | 2 | 1 |
| Banco Products | 2 | 0 |
| Jupiter Life Lin | 2 | 0 |
India currently commands a 17.8% share in the MSCI Emerging Market Index. Due to the country’s current momentum and outperformance as compared with other emerging markets, Nuvama projects the index representation to move upwards to 18.5%.
This can be attributed to multiple reasons:
- India’s standardised foreign ownership limit in 2020.
- Robust performance by Indian equities, particularly in the midcap segment, led to numerous inclusions in every review.
- Relative underperformance by other EM packs, especially China.
The notable factors contributing to this increase in 2023 include India’s substantial rally compared to other emerging markets and MSCI’s shift from semi-annual to quarterly rebalancing for stock inclusions and exclusions, said Nuvama.
With Thanks Reference to: https://www.businesstoday.in/markets/stocks/story/ireda-jp-associates-mstc-kpi-green-energy-db-realty-shares-in-focus-after-msci-rejig-417230-2024-02-13 and https://www.ndtvprofit.com/markets/msci-rejig-india-may-see-1-billion-inflow-mamaearth-ireda-may-get-added-to-small-cap-index
