MSCI Index review on November 6: Voltas, BSE, Adani Energy, among six likely inclusions; HDFC Bank weight increase eyed

BSE, Adani Energy and Voltas are among six Indian stocks that are expected to be included in the MSCI Standard Index during its rebalancing scheduled on November 6. The index rejig will be announced on Wednesday, post the market hours and the changes will be effective from November 26.

According to a report by IIFL, equity shares of BSE, Voltas, Adani Energy Solutions, Alkem Laboratories, Oberoi Realty and Kalyan Jewellers India are the top contenders for the inclusion in the MSCI Index.

In the periodic rebalancing of MSCI indices, inclusion of stocks is expected to lead to substantial inflows of global funds that track these indices. The MSCI India Standard Index tracks the performance of large and mid-cap segments within the Indian equity market.

Estimated Inflows

IIFL estimates Voltas to be the top beneficiary in the upcoming review with potential passive inflows worth around $313 million.

BSE shares are expected to receive $224 million due to inclusion in the MSCI India Standard Index as a part of November rebalancing, while Kalyan Jewellers India may attract inflows amounting to $238 million.

As per the IIFL report, Alkem Laboratories is expected to see nearly $200 million in inflows if added and Adani Energy Solutions to gain $208 million inflows, while Oberoi Realty is estimated to receive $192 million.

HDFC Bank Weight Increase

In its August review, MSCI announced an increase in the weightage of HDFC Bank shares in its indices, to be implemented in two phases. The first phase occurred during the August rebalancing, while the second phase is scheduled to follow the November review.

The September shareholding pattern of HDFC Bank indicated that its Foreign Institutional Investor (FII) headroom remained comfortably above 20%. Consequently, HDFC Bank is expected to experience the second phase of weight increase in MSCI November 2024 rebalancing. This adjustment is projected to result in additional inflows of approximately $1.8 billion into HDFC Bank.

Meanwhile, HDFC Bank stock price has remained flat this year. The stock has gained over 6% in three months, but is flat year-to-date (YTD). In the past one year, HDFC Bank share price has gained more than 15%.

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