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In a sweeping overhaul of its global equity benchmarks, MSCI has announced the inclusion of 42 Indian stocks in its August 2025 index review, with notable additions such as Swiggy and Ola Electric Mobility. The reshuffle spans both the MSCI India Standard and Smallcap indices, and will take effect after market close on August 26, 2025. While the rejig is expected to bring inflows into several newly added stocks, India overall may witness a net outflow of USD 250–270 million, according to brokerage estimates.
The MSCI index rebalancing is a critical event for global investors, as it influences fund flows into emerging markets. Stocks added to the indices often see a surge in demand from passive funds tracking MSCI benchmarks.
Major Additions to MSCI India Standard Index
1. Swiggy
- Estimated inflow: USD 293 million
- Shares impacted: 93.8 million
- High probability inclusion, expected to boost liquidity and visibility
2. Vishal Mega Mart
- Estimated inflow: USD 256 million
- Strong retail footprint and growth trajectory
3. Hitachi Energy India
- Estimated inflow: USD 233 million
- Strategic player in India’s energy transition
4. Waaree Energies
- Estimated inflow: USD 230 million
- Solar energy firm with expanding capacity
These inclusions reflect MSCI’s focus on high-growth, scalable businesses across consumer, energy, and infrastructure sectors. The additions are expected to trigger significant trading activity and price movements in the coming weeks.
Float Adjustments and Weight Ups
Several existing constituents saw weight increases due to float adjustments:
- CG Power & Industrial: USD 56 million inflow
- 360 One Wam: USD 7 million
- One 97 Communications (Paytm): USD 4 million
- J.B. Chemicals & Pharma, Kaynes Technology, Afcons Infrastructure, and others saw inflows between USD 2–4 million
These adjustments typically reflect changes in shareholding patterns or free float availability, impacting the stock’s weight in the index.
MSCI Smallcap Index: New Entrants and Exits
The Smallcap Index saw a flurry of activity with 12 additions and 4 exclusions. Key inclusions include:
- Sona BLW Precision: USD 32 million inflow
- Thermax: USD 23 million
- Nexus Select Trust: USD 20 million
- Inventurus Knowledge Solutions: USD 11 million
- Capri Global Capital, Brainbees Solutions, Lumax Auto Technologies, Belrise Industries, and others
Ola Electric Mobility also made it to the Smallcap Index with a modest inflow of USD 1 million, signaling growing investor interest in India’s EV ecosystem.
Stocks excluded from the Smallcap Index include:
- Bharat Dynamics
- Bondada Engineering
- Hikal
- Kennametal India
These exclusions may lead to short-term selling pressure as passive funds realign their portfolios.
Sectoral and Strategic Implications
The August 2025 rejig highlights several emerging themes:
- Rise of consumer-tech and retail platforms like Swiggy and Vishal Mega Mart
- Renewed focus on clean energy and EVs with Waaree Energies and Ola Electric
- Infrastructure and industrial plays gaining traction through CG Power and Afcons
- Healthcare and specialty chemicals maintaining relevance via J.B. Chemicals and Privi
The rejig also underscores MSCI’s evolving methodology, which increasingly favors liquidity, scalability, and sectoral balance.
Investor Takeaways
- Stocks added to MSCI indices often see price appreciation due to passive fund buying
- Float adjustments can subtly shift weightings and influence fund allocations
- Exclusions may lead to temporary selling pressure but do not necessarily reflect poor fundamentals
- The rejig offers insights into global investor preferences and sectoral momentum
Looking Ahead
With the changes set to take effect on August 26, market participants will closely monitor price movements and volumes in the impacted stocks. The MSCI rejig serves as a barometer of India’s evolving equity landscape, spotlighting companies that align with global investment narratives.
Sources: Economic Times, Financial Express, News18.
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