MSCI, one of the biggest index compilers globally has rejigged its MSCI India Index that constitutes the MSCI Global Standard Indexes. As part of its semi-annual review, MSCI has announced the addition of five Indian listed companies namely Biocon Ltd, Indraprastha Gas, Jubilant Foodworks, Tata Consumer and Torrent Pharmaceuticals to its India index. The stocks will be added to the index by May end.
Besides the five inclusions, the MSCI rebalancing suggests deletion of 4 Indian equities which were originally part of the index and include Ashok Leyland, M&M Financial Services, Shriram Transport Finance, and Tata Power.
Further in addition to the 9 stocks that will be added to or deleted from the MSCI Global Standard Index, MSCI will include 18 stocks to the global small cap index. Among these are names like Ashok Leyland, Bharat Heavy Electricals, Future Retail, Cummins India and Tata Power among others.
MSCI said, in the MSCI ACWI index a total of 137 stocks will be included and 181 will be removed. And to the MSCI World Index, a total of 62 additions will be made, while 93 stocks shall be deleted.
Though most of the inclusions to the index were largely as per predictions made by top brokerages, there have been seen minor deviation. "We were not expecting Jubilant Foodworks to enter but the index but it has. Among the five additions Indraprastha Gas will likely have half weightage factor because it has less headroom, so we are expecting only $48 million buying here," Nitesh Jain, VP - Institutional Derivatives Research, Motilal Oswal told a leading business daily.
"We expected four names to move out, which were M&M Financial Services, Tata Power, and Bharat Forge. Unfortunately, Bharat Forge has not been excluded but instead, Shriram Transport has been deleted," he added.
After the rejig, the stock of Torrent Pharma declined over 2%, Biocon also traded lower by more than 1% and IGL too slipped in trade. On the contrary, Jubilant Foodworks was trading higher by 5%.