IREDA, JP Associates, MSTC, KPI Green Energy, DB Realty shares in focus after MSCI rejig

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. 

MSCI rejig: PSU stocks PNB, BHEL, NMDC, Union Bank may see $668 million passive 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.

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Also read: MSCI rejig: PSU stocks PNB, BHEL, NMDC, Union Bank may see $668 million passive inflows

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