In the latest reshuffle by MSCI (Morgan Stanley Capital International), Hyundai Motor India Ltd. has emerged as the only large-cap Indian stock to secure a spot in the MSCI Global Standard Indexes. Meanwhile, Adani Green Energy has been removed, signalling a significant shift in the composition of these influential indices. These changes will take effect after the market closes on February 28, 2025. Here's a detailed breakdown of the developments.
Understanding MSCI Index Rejigs
The MSCI index review, conducted periodically, plays a critical role in the global financial markets. These reviews determine the inclusion or exclusion of stocks based on factors like market capitalisation, liquidity, and performance. Institutional investors closely track the indices, and adjustments often lead to shifts in investment patterns.
The February 2025 review highlights key updates that reflect market trends, corporate growth, and changing dynamics. For Indian companies, the review brings mixed results, with Hyundai Motor India gaining prominence and Adani Green Energy facing exclusion.
Hyundai Motor India: A Big Win
Hyundai Motor India Ltd. has been added to the MSCI Global Standard Index, making it the only large-cap Indian company to achieve this distinction in the current review.
The company's inclusion also leads to a weight increase, positioning it among the top-performing Indian stocks in this review.
Adani Green Energy Faces Exclusion
Conversely, Adani Green Energy has been deleted from the MSCI Global Standard Index.
Adani Green Energy's removal is not isolated; several prominent companies have also experienced adjustments.
Weight Changes: Winners and Losers
Stocks with Increased Weightage
Several stocks saw an increase in their weight within the MSCI Standard Index. Key gainers include:
- Zomato
- Mankind Pharma
- Varun Beverages
- IndusInd Bank
- PB Fintech
- Voltas
- Torrent Pharmaceuticals
- Dixon Technologies
These stocks highlight their strong market standing
Stocks with Decreased Weightage
Conversely, major players such as Reliance Industries, HDFC Bank, Infosys, ICICI Bank, Bharti Airtel, Tata Consultancy Services (TCS), Mahindra & Mahindra (M&M), Larsen & Toubro and Axis Bank experienced a decline in their weightage. This change highlights the shifting trends and evolving composition of the MSCI index.
Changes in the MSCI India Domestic Small-Cap Index
The review also updated the MSCI India Domestic Small-Cap Index. Twenty stocks were added, while 17 were removed.
Key Additions
Notable inclusions in the small-cap index include:
- Afcons Infrastructure
- Akums Drugs and Pharma
- Ola Electric Mobility
- Jyoti CNC Automation
- Sundaram Clayton
These additions point to promising growth potential and emerging market relevance.
Key Deletions
On the other hand, stocks like Advanced Enzyme Technologies, Bajaj Hindusthan Sugar, Mahindra Logistics, and Spandana Sphoorty Financial were among those removed from the index.
Adani Energy Solutions: Upcoming Adjustments
MSCI has clarified that the February 2025 review will include changes to Adani Energy Solutions's Number of Shares (NOS), Foreign Inclusion Factor (FIF), and Domestic Inclusion Factor (DIF). These updates had been postponed earlier but will now be implemented.
Summary of MSCI February 2025 Review
MSCI's February 2025 review adds Hyundai Motor India Ltd. to the MSCI Global Standard Indexes while removing Adani Green Energy. Stocks like Zomato and Mankind Pharma gained weightage, whereas Reliance Industries and HDFC Bank saw reductions. The MSCI India Domestic Small-Cap Index added 20 stocks, including Ola Electric Mobility, and removed 17. Pending adjustments for Adani Energy Solutions will be implemented. Effective February 28, 2025, these changes reflect evolving market trends.
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