India's weight on the MSCI Global Standard index, which measures developing market companies, has soared to a new high, indicating that the country's equity markets will see inflows of almost $3 billion. India has reduced the gap with China on the benchmark MSCI index. While China's weight in the index would decline to 20.2% from 25%, India's weight will grow to 19.8% from 19.2. The modifications to index weights will take effect after the markets close on August 30. India's weight is anticipated to reach beyond 20% by the end of November.
According to Abhilash Pagaria, head of Nuvama Alternative and Quantitative Research, this will result in an inflow of $2.7 billion to $3 billion into India.
HDFC Bank, India's largest private lender and the heaviest stock on the benchmark NSE Nifty 50, would see its weightage grow, potentially generating $1.8 billion in inflows, according to Pagaria.
"Given the current pace and momentum in domestic equities, India could potentially cross 22 percent weightage by year-end" on the MSCI index, Pagaria stated.
Bharti Airtel, Coal India, and Mphasis are among the businesses whose weightage on the index will be increased, while Maruti Suzuki India, LTIMindtree, Ambuja Cements, Adani Enterprises, Yes Bank, and SRF will be reduced.
Bandhan Bank will not be included in the MSCI Emerging Markets index; instead, Dixon Technologies, Vodafone Idea, Oil India, Zydus Lifesciences, Rail Vikas Nigam, Prestige Estates Project, and Oracle Financial Services will be included.
The MSCI India Small-cap index will see the addition of around 25 companies. Inflows of between $3 and $26 million are anticipated, according to Nuvama.
