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

Four PSU shares namely Punjab National Bank (Ltd), Bharat Heavy Electricals Ltd (BHEL), NMDC Ltd and Union Bank of India are likely to attract a combined $668 million in passive inflows following the inclusion in MSCI  Global Standard Index, Nuvama Alternative & Quantitative Research said on Tuesday. The four PSU stocks and GMR Airports Infra were added to MSCI Global Standard index in the February review, while 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.

Jio Financial Services Ltd (JFS), the demerged financial services entity of Reliance Industries, is expected to see $73 million outflows due to weight reduction. Container Corporation of India may also see about $23 million outflows due to cut in weight, Nuvama said.

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As per Nuvama GMR Airports was a surprise entry for February, having been its high conviction entrant candidate 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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