Changes in MSCI India index to be effective from today; JSPL, Tata Elxsi among 4 additions, HDFC excluded

As many as five changes are set to be made in the MSCI Index, starting Wednesday, June 1, 2022. The MSCI India Standard Index has included four stocks, namely Adani Power, AU Small Finance Bank, Jindal Steel and Power, and Tata Elxsi, while it excluded HDFC AMC from the index.

These changes in the MSCI India Standard Index will come into effect from June 1.  However, index funds are expected to rejig portfolio on May 31 itself.  

The new additions are deletion were announced earlier, however, the changes will be executed from Wednesday.  

Zee Business research analyst Varun Dubey said these changes can lead to inflows and outflows. "Inflows of around $10-20 crore are expected in the four newly added stocks, while HDFC AMC can see an outflow of around $8.5 crore," he said.

Besides MSCI India Standard Index, as many as 44 stocks have been included in MSCI small cap index and 14 have been excluded from the small cap index index.  

Despite exclusion, Shares of HDFC AMC rose around four per cent on Tuesday. Among the four new additions, Adani Power declined five per cent, AU Small Finance Bank dropped three per cent, JSPL ended lower by more than two per cent and Tata Elxi gained more than four per cent. On Tuesday.  

MSCI indices facilitate the construction and monitoring of portfolios in a cohesive and complete manner, avoiding benchmark misfit. In MSCI,  stocks are weighted according to their market capitalization—calculated as stock price multiplied by the total number of shares outstanding.

MSCI has been at the forefront of index construction and maintenance for more than 50 years, launching its first global equity index in 1969.