Tata Consumer, Indraprastha Gas, Torrent Pharmaceuticals, Biocon and Muthoot Finance are the inclusion candidates for the MSCI index which is to be updated on May 13, according to a Morgan Stanley research report.
The stocks that are likely to be excluded as per Morgan Stanley are Bharat Forge, Tata Power and Mahindra and Mahindra Financial Services. HDFC Standard Life Insurance is likely to see a weight increase.
The chances of inclusion of Tata Consumer are high with an expected inflow $93 million, the highest amongst all candidates. Torrent Pharma also has high likelihood of inclusion with likely inflows of $73 million.
The likelihood of inclusion of Indraprastha gas is medium with likely inflows of $61 million and so are the chances of Biocon with expected inflows of $62 million. The likelihood of Muthoot Finance is low with likely inflows of $51 million.
Among the exclusion candidates, the likelihood of exclusion is high for all three candidates. Bharat Forge is likely to see outflows of $40 million, Tata Power at $21 million and Mahindra and Mahindra Financial Services is likely to see outflows of $31 million.
The likelihood of weight increase of HFDC Standard Life Insurance is high with likely inflows of $ 66 million.
MSCI is due to announce the results of its semiannual index review on the morning of May 13, including a list of stock additions and removals along with changes in weightings. All changes will be made as of the close of May 29, 2020.
Using the MSCI framework, the most important conditions to be met are full market cap and free float market cap), Morgan Stanley in this report has short-listed stocks that meet the criteria to be included in the MSCI India Index. It has highlighted the potential list of stocks that could see inclusion, deletion and weight increases.
Morgan Stanley has made corrections to the ‘Exclusion candidates’ list in this report, adding in Mahindra and Mahindra Financial