MSCI August Review Could Add 12 Indian Stocks, Spark $2.3 Billion Inflows

India's upcoming Morgan Stanley Capital International (MSCI) Standard Index review could trigger passive inflows of nearly $2.3 billion, with up to 12 stocks likely to be added and three removed in the August rebalancing. MSCI is scheduled to announce the changes after market hours on 12 August, with the revised index taking effect from 31 August.

The MSCI India rebalancing is closely tracked by investors because changes to the Standard Index often lead to sizeable buying and selling by global passive funds that replicate the benchmark. These funds adjust their holdings once the revised index comes into effect.

Which Stocks Are Most Likely To Be Added?

Adani Green Energy, Groww (Billionbrains Garage Ventures) and Adani Energy Solutions have emerged as the strongest candidates for inclusion in the MSCI India Standard Index.

On the inflow front, Groww is expected to lead the pack with about $821 million, followed by Adani Green Energy at $773 million and Adani Energy Solutions at $342 million if they make the index.

Ather Energy remains in contention, though its inclusion is less certain. Lenskart Solutions and SAIL are also being watched, but both are seen as having relatively lower chances of making the final list. If included, they could attract passive inflows of about $244 million, $176 million and $170 million, respectively.

Which Stocks Could Exit The Index?

Apart from fresh additions, several companies could move from the MSCI India Small Cap Index to the Standard Index. Laurus Labs and Biocon are seen as strong candidates, while Coforge remains a medium-probability pick. Glenmark Pharma and Uno Minda are also in contention, though their chances are considered lower.

If included, estimated passive inflows range from $206 million for Uno Minda to $567 million for Coforge.

On the other hand, Astral appears most at risk of dropping out of the index. SBI Cards could also make the exit list, while Balkrishna Industries faces a smaller chance of being removed. If that happens, the three stocks are expected to see passive outflows of between $138 million and $167 million.

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