India’s three newly listed insurers — ICICI Lombard General Insurance, SBI Life Insurance, HDFC Life Insurance — and RBL Bank and Info Edge (India) could be included in MSCI India index in the upcoming re-balancing scheduled later this month. Vodafone Idea and Cadila Healthcare could exit.
Analysts believe these stocks might remain on the radar of FIIs over the coming weeks. Those entering the gauge might climb, while the reverse might happen to those exiting.
The MSCI quarterly index review results will be announced on May 13, and the effective date for rebalancing will be May 29, 2019.
The global index provider is also likely to make changes to its emerging market index during this month’s review, which includes the inclusion of Saudi Arabia and Argentina, and increasing the weights of China A shares and Thailand. The EM rebalance could result in about 28 bps reduction in India’s weight in MSCI EM index with an outflow of nearly Rs 5,000 crore in the coming weeks, according to market estimates.
“We have identified certain stocks such as RBL Bank, ICICI Lombard General Insurance, SBI Life Insurance and HDFC Life Insurance that are eligible for inclusion in the MSCI India index,” said Pankaj Pandey, head of research, ICICI Securities. “These stocks are likely to be included in the upcoming MSCI reviews”.
The parent of jobs portal Naukri-.com and real estate website 99acres.com, Info Edge (India), which owns about 26.4 percent stake in Zomato, is likely to get an FII inflow of about Rs 1,000 crore in the coming weeks. The stock has risen nearly 57 percent in last one year. RBL Bank, which gained 30 percent in the last one year, is expected to get about Rs 850 crore from foreign funds.
ICICI Lombard, which has risen 58 percent since its listing on September 27, 2017, is likely to get an inflow of Rs 450 crore in the coming weeks. HDFC Life Insurance and SBI Life Insurance are expected to see FII inflows of Rs 500 crore each.
Vodafone Idea and Cadila Healthcare could lose about Rs 375 crore and Rs 125 crore FII money each if they are excluded from the index. These two stocks have fallen 58 percent and 28 percent, respectively, in the last one year.
The MSCI India index is designed to measure the performance of the large-cap and midcap segments of the Indian market. Currently, with 80 constituents, the index covers about 85 percent of the Indian equity universe. Sectorally, financial services would have the highest weightage in the index, followed by the technology space.―India Finance News