Jindal Steel and Power (JSPL), Tata Elxsi, Voltas, Varun Beverages and Astral are the five stocks on analysts at Edelweiss Alternate Research's radar that could see possible inclusion in the MSCI Standard Index's semi annual review in May 2022, whereas, Indraprastha Gas and MRF (India) could be the possible exclusions, this is if the stock movement makes the cut till the cut off date.
“The stocks on our radar are given the start of the review period is almost a month away from now and stock price movements in the interim might spring a surprise," brokerage Edelweiss said.
In the wake of three eventful SAIR (Semi Annual Review) – in November 2020, May 2021 and November 2021, it anticipates the upcoming May 2022 SAIR to be less exciting one as there are no names yet that could make the cut in its view. The market cap cut off date could be any day between April 18-29, 2022 whereas the announcement date is expected to be on May 13 and rebalance date on May 31.
“India’s weighting in the widely tracked MSCI Emerging Markets (EM) index shot up to appx. 12.3% now from appx. 8.1% in end of Oct-2020. The two factors that have driven fresh inclusions and an uptick in the weightings of existing Indian constituents are the new regime on foreign ownership limit (FOL) taking effect in the Nov-20 review; and domestic stocks’ strong outperformance to other EM counterparts," Edelweiss added.
Meanwhile, weight up could be seen in Reliance Industries (RIL) in the index as post the conversion of Partly Paid up shares to Ordinary shares in November 2021, the domestic Indices (Nifty and Sensex) have already made the adjustments and now the brokerage expects MSCI to take the same in account in May Review. “The ballpark inflow could be $180-200 mn which is appx half a day ADV. It is a non-event in terms of impact," the note stated.
