MSCI rejig: HDFC Bank, Tata Power, Voltas, BSE, Kalyan shares likely to see huge inflows

HDFC Bank Ltd is all set to see a massive $1.9 billion passive inflows, while shares of Voltas Ltd, BSE Ltd, Kalyan Jewellers India Ltd, Oberoi Ltd and Alkem Laboratories Ltd are also expected to see strong inflows in excess of $200 million each on MSCI rejig in the MSCI Global Standard index.

In the case of HDFC Bank, the final tranche of float-led weight adjustment will take place, potentially resulting in an inflow of approximately $1.9 billion, which is equivalent to 6.5 days of its average daily volume (ADV). Voltas could see $312 million inflows, followed by BSE ($259 million), Kalyan Jewellers ($241 million), Oberoi Realty ($215 million) and Alkem ($204 million).

Tata Power Company Ltd and JSW Energy Ltd may attract $44 million inflows each on weight increase. Samvardhana Motherson, Jindal Steel & Power, PB Fintech and APL Apollo Tubes may see up to $42 million inflows, Nuvama suggested.

Net-net, the adjustments which are slated for November 25, may result in inflow of $2.5 billion in FII passive flows. With five inclusions and no exclusions, the net stock count post-rejig will be 156 for India in the MSCI Standard/EM Index.

"Additionally, there will be a net inclusion of 13 stocks in the Smallcap Index, bringing India's total stock count in the small-cap index to 525," Nuvama said.

The MSCI rejig would mean India's representation in the MSCI EM Index is set to increase from the current 19.3 per cent to closer to 19.8 per cent. This increase in weight, in terms of basis points, is the highest among any EM Index in this rejig.

At present, the highest representation in the MSCI EM Index is China, with a weight of 27 oer cent and 598 members in the index, compared to India's 19.3 per cent weight with 151 stocks.

There is enormous potential for far more additions to happen for India, said Abhilash Pagaria, Head, Nuvama Alternative and Quantitative Research.

"I remain extremely bullish on India, especially with active participation from Mutual Funds and HNI/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," he said.