Index provider MSCI is likely to include four stocks and change the weightage of nearly five companies in this month’s index review, according to Morgan Stanley.
The brokerage expects MSCI to include Hindustan Aeronautics Ltd., Max Healthcare Institute Ltd., Cummins India Ltd., and Ashok Leyland Ltd. in the index. The additions are expected to bring $1.3 billion, or about Rs 10,632.58 crore, of inflows.
MSCI India’s weight in MSCI Emerging Markets has risen from 9% to 14% since October 2019, and the number of stocks in the index has risen from 80 to 114. After the May review, four more stocks are expected to be added to this list.
According to the MSCI stock inclusion methodology, the most important conditions to be met are the required minimum market cap and a free float-adjusted market capitalisation equal to or higher than 50% of the minimum size requirement. Other criteria also include the global minimum foreign inclusion factor requirement and the minimum foreign room requirement, among others.
The index provider will release the results of its index review on the morning of May 12, and all changes will be made as of the close of May 31, effective June 1.
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