India's weightage rise in MSCI Global index to boost foreign inflows after two years (updated)

Lodha Developers

15/11/2023 08:00

(Adds analyst comments, details about foreign inflows)
    By Bharath Rajeswaran and Kashish Tandon
       BENGALURU, Nov 15 (Reuters) - Index provider MSCI raised
India's weightage in its Global Standard (Emerging Markets)
index to 16.3% from 15.9% on Tuesday, a move likely to increase
the flow of foreign funds after a two-year lull.
    This marks "a significant increase over the past three
years, almost doubling its weight," according to a note by
Nuvama Alternative & Quantitative Research. 
    Foreign portfolio investors (FPIs), who generally use the
MSCI indexes as a gauge to allocate their passive flows, have
already bought 1,217.05 billion rupees ($14.64 billion) worth of
Indian equities this year.
    They sold Indian shares worth 1,400.10 billion rupees and
376.32 billion rupees on a net basis in fiscal 2022 and 2023,
respectively.
    India, which has the second-highest weightage in the index
after China's near-30%, could receive inflows of as much as $1.5
billion post the rejig, added the note from the domestic
brokerage.
    "The increase in India's weightage is good in terms of India
getting its rightful share in the overall capital flows," said
Rajeev Thakkar, chief investment officer and director at PPFAS
Mutual Fund.

   
    MSCI added nine Indian stocks to the index, including
automaker Tata Motors  TAMO.NS , cables maker Polycab India
 POLC.NS , real estate firm Macrotech Developers  MACE.NS ,
IndusInd Bank  INBK.NS  and Paytm-parent One 97 Communications
 PAYT.NS . 
    The inclusions will bring the country's stock count in the
index to 131, with changes coming into effect from market close
on Nov. 30. No Indian stocks were deleted to accommodate the new
additions.
    IndusInd Bank  INBK.NS , Suzlon Energy  SUZL.NS , Persistent
Systems  PERS.NS , and APL Apollo Tubes  APLA.NS  will each
receive maximum inflows of $355 million, $289 million, $255
million and $228 million after the inclusion, Nuvama said. 

($1 = 83.1080 Indian rupees)

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Additions to MSCI Global Standard index    https://tmsnrt.rs/3srpCgH
Post inclusion into MSCI Global Standard index    https://tmsnrt.rs/3SH3xVT
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Kashish Tandon and Bharath Rajeswaran in
Bengaluru; Editing by Janane Venkatraman)
 ((Kashish.Tandon@thomsonreuters.com;))