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Paytm, Nykaa, Adani Energy and others may soon be included in MSCI Global Standard Index: Report
The MSCI Global Standard Index tracks stock performances from markets across the world and is used as a benchmark by investors to monitor the markets.
A slew of companies, ranging from Coromandel International, One 97 Communications (Paytm), FSN E-Commerce (Nykaa), and even Adani Energy Solutions, may be contenders to join the MSCI Global Standard Index.
Fertiliser giant Coromandel International, in particular, could see massive inflows of about $210 million if included, according to an Economic Times report, which cited estimates from Nuvama Alternative Research.
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The company's stock has gained 14% year-to-date so far, outperforming the Nifty, which has declined by 1% over the same period.
The inflows are expected because global passive funds, including major exchange-traded funds (ETFs), track the MSCI indices closely.
The MSCI Global Standard Index is a market capitalisation-weighted index that tracks the performance of stocks in global markets. Investors use it as a benchmark.
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Due to this, changes in the index composition make the funds realign their portfolios accordingly, leading to massive capital flows either into or out of the stocks in question.
The next MSCI index review will be announced on May 14, with the changes coming into effect from May 30 onwards. The cut-off period for determining the eligibility usually spans the last 10 trading days of April.
Meanwhile, Paytm's parent company One 97 Communications may see potential inflows of $209 million despite losing 15% of its share price this year, according to the report.
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FSN E-Commerce and Adani Energy Solutions have both risen by 16% and 11%, respectively this calendar year, also potentially making them strong candidates for being included in the index. Both of these stocks are expected to attract estimated inflows worth $178 million each.
On the other hand, companies which may be excluded from the list may be Thermax and Sona BLW Precision, which have fallen 25% and 17%, respectively.
According to the report, this could lead to an outflow of $162 million for Thermax and about $111 million from Sona BLW.
