Bikaji, Fusion Micro, Kaynes, KFin, Syrma SGS: five debutants among 14 additions to MSCI India Smallcap index

Index service provider MSCI has announced multiple changes in its MSCI India Domestic Smallcap Index. MSCI has revised the constituents of its India-based index on Friday and effective change will be applicable from May 31, 2023, the company said.

MSCI has announced to add as many 14 stocks to the index which includes six stocks which were listed on the bourses less than 12 months ago. On the other hand, it will omit eight existing constituents from the index, leading to their exclusion from the index.

Among the new additions, Bikaji Foods International, Fusion Micro Finance, Kaynes Technologies, KFin Technologies, Syrma SGS Technology and NMDC steel have spent less than 12 months as listed stock at Dalal Street.

Barring the NMDC steel, which was demerged from NMDC in October last year, floated their initial public offerings (IPOs) between August 2022 to December 2022.

Action Construction Equipments, Anupam Rasayan India, Gland Pahrma, IRCON International, Maharashtra Seamless, Power Mech Projects, Rail Vikas Nigam (RVNL) and Ujjivan Small Finance Bank (Ujjivan SFB) are among other inclusion in MSCI India Smallcap index.

A few of these stocks, including RVNL, Power Mech, Ujjivan SFB and IRCON have delivered a strong performance in the last one year, while others such as Gland Pharma have been downgraded after a steep correction in the stock prices.

On the contrary, Abbott India, Astec Lifesciences, Dhani Services, Dilip Buildcon, Gillette India, PC Jeweller, Thyrocare Technologies and Vakrangee have been constituents of MSCI's exclusion list. Majority of these stocks have remained laggards in the last one year.

The exclusion and inclusion in MSCI India Smallcap index depend upon the company size, stock prices and free-float of the company. The free float represents the proportion of outstanding shares available for purchase in public equity markets by international investors.

MSCI has announced changes in other indices as well, including weights rejig coupled with additions and exclusion, which will impact a host of Indian companies in terms of inflow and outflows from the companies.

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