MSCI November Rejig: What Changed for Indian Stocks

In its November 2024 review, MSCI made adjustments across Indian stocks, impacting both domestic and global indices. These changes, effective November 25, 2024, are expected to draw around $2.5 billion in passive inflows to Indian equities, showcasing the rising influence of Indian stocks in global markets.

Changes in the MSCI India Domestic Small Cap Index

The MSCI India Domestic Small Cap Index saw 15 additions and 10 deletions to refine the representation of smaller Indian companies. Notable additions include Aadhar Housing Finance, Brainbees Solutions (FirstCry’s parent), DCM Shriram, and PC Jeweller. Meanwhile, stocks such as Delta Corp, GMR Airports Infra, and TCI Express were removed, indicating shifts in market priorities.

Weightage Adjustments for Large-Cap 

HDFC Bank’s adjustment factor rose to 1.00 from 0.75, increasing its Foreign Inclusion Factor (FIF) to 0.74 from 0.56, which could result in inflows of $1.88 billion. Other major companies, like Reliance Industries, ICICI Bank, and Infosys, saw reduced weightage, which may temper inflows to these stocks.

Mid-Cap Upgrades & Expected Inflows

Several stocks transitioned from small-cap to mid-cap, including Voltas, Kalyan Jewellers, BSE, Oberoi Realty, and Alkem Laboratories. This reclassification is likely to bring substantial inflows, with Voltas expected to attract over $300 million and BSE around $260 million.

Global & Emerging Market Changes

India’s weight in the MSCI Emerging Markets Index rose from 19.3% to 19.8%, the highest basis-point increase among emerging markets. In contrast, China’s weightage decreased from 27% to 26.8%.

Conclusion: This rejig showcases India’s strengthening role in global markets, with more stocks and increased weightage. Market analysts remain bullish, anticipating further growth as India gains a stronger footing in global equity indices.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.