Suzlon Energy, YES Bank, Zomato to see inflows on MSCI rejig; Paytm to see outflow

India is expected to witness a net inflow of about $2.5 billion in FII passive flows as the MSCI rejig adjustments are slated for today that is May 31, 2024, said Abhilash Pagaria from Nuvama Institutional Equities. However, most of the price action is baked in and today will be more of a liquidity event in the last thirty minutes, he said.

13 Indian stocks will be included in the MSCI Standard Index, while three others will make their exit.The net stock count post-rejig will be 146 for India in the MSCI Standard/EM Index, said Nuvama's research note.

Among inclusions, PB Fintech (PolicyBazaar), NHPC, Phoenix Mills, Indus Towers, Sundaram Finance, Solar Industries, Torrent Power, Jindal Stainless, Thermax, Bosch, JSW Energy, Mankind Pharma and Canara Bank will be included in the index, witnessing individual inflows of $165-275 million each.

Among the exclusion, One 97 Communications (Paytm), Berger Paints and Indraprastha Gas (IGL) will exit the index, with outflows raning between $78-117 million each.

On the other hand, stocks like AU Small Finance Bank, Vedanta, Macrotech Developers, Zomato, Polycab India, Samvardhana Motherson, YES Bank and Suzlon will see an upside in their weightage, with inflow ranging from $16-87 million. Dabur India, ICICI Lombard General Insurance and Jubilant Foodworks's weightage shall be reduced, leading to a selloff of $18-47 million.

Additionally, there will be a net inclusion of 14 stocks in the MCI Smallcap Index, bringing India's total stock count in the small-cap index to 497. As a milestone, India's representation in the MSCI EM Index is set to increase to closer to 19 per cent, which is currently at 18.3 per cent. This increase in weight, in terms of basis points, is the highest among any EM Index in this rejig.

"I remain extremely bullish on India, especially with active participation from mutual funds, HNI and retailers in the Indian equity markets. We should anticipate many more inclusions in the EM Index. We are still at the tip of the iceberg. There is enormous potential for far more additions to happen for India. Stay bullish on India, said Pagaria in his note.