5 Indian Stocks Which are Possible Candidates for Inclusions and Exclusions in MSCI’s Semi-Annual Index Review due in May 2022

2 min read

The MSCI India Index is designed to measure the performance of the large and mid-cap segments of the Indian market. There are a lot of institutional investors who blindly follow the MSCI index for investment purposes, with more than $400 billion in assets under management (AUM). During global index provider MSCI’s semi-annual index review (SAIR) next month there is a high probability that some stocks may get included and excluded from this MSCI index. So Which stock could make its entry or exit from the index and on what basis, let’s discuss it in this article as we move ahead?

3 Stocks to Watch:

The probability of these three stocks having movement in the MSCI index is high:

i) Tata Elxsi

ii) Jindal Steel and Power

iii) HDFC AMC

Stocks that are a strong contender to be included in MSCI’s Semi-Annual Index:

  • There is a high possibility that TATA Elxsi and the Jindal Steel and Power ltd. will be added to the MSCI index.
  • If TATA Elxsi is added to the MSCI index then the fund flow expected is $280 million or Rs. 2,150 Cr. passively and it will create a huge demand and will also impact the price of the stock.
  • If Jindal Steel and Power Ltd. are added to the MSCI Index the fund flow expected is $215 million or Rs. 1650 cr. passively.

Stock Which Can be Excluded:

  • HDFC AMC has a high probability of being excluded from the MSCI index because of its performance. If it happens there will be a fund outflow of $107 million or Rs. 820 Cr.
  • HDFC AMC is witnessing growth in AUM but the advantage of charging expense ratio is reducing on regular basis. Hence, growth from an earnings viewpoint.

Other Possible Inclusions & Exclusions:

  • 2 more stocks might see the movement from the MSCI index that is Adani Power and Indraprastha Gas.
  • Adani power might be included because of its performance, but the probability is low, but if it happens then it will have a fund inflow of around Rs. 1500 Cr.
  • Indraprastha Gas might get excluded from it and an outflow of 800 Cr. will be seen if it gets excluded from the MSCI index.

What should the Investors do?

Movement in the MSCI index might have a big impact on the price of the stocks because there are big institutional investors and the fund flow involved is also very huge in amount. The Investor can keep these stocks on the radar and should carefully assess the stocks when making an investment decision.

Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent are commendation to buy or sell stocks or MF.

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