IDFC First Bank is expected to see inflows of $200 million from global passive funds if included in the MSCI index. The stock has rallied nearly 48% so far this year. Power Finance, Ashok Leyland and Cummins India could see inflows of around $190 million each if these stocks are in the MSCI index. The Power Finance stock has rallied 83% since January 1, while Ashok Leyland and Cummins shares surged nearly 30% during this period.
“We are reiterating our top conviction names for the upcoming MSCI August review, such as PFC, HDFC AMC, IDFC First Bank, Ashok Leyland, Cummins and Astral, which we have been consistently highlighting since May 2023,” said Abhilash Pagaria, head, Nuvama Alternative & Quantitative Research. “In the event that any of the the names don’t make it to the August review, they will be strong candidates for the November review, provided they continue to exhibit positive momentum.”
Global passive funds, such as exchange-traded funds (ETFs), structure their portfolios based on these indices. As a result, any inclusion or exclusion and change in composition lead to these funds adjusting their allocations.
Nuvama said Adani Group cement company ACC could be dropped from the MSCI index as the stock declined nearly 16% so far this year.