Saturday, August 13, 2022

IRCTC among seven stocks that could see MSCI inclusion: Report

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New Delhi: As the American finance company MSCI Inc. (earlier known as Morgan Stanley Capital International and MSCI Barra) is set to announce its semi-annual index rejig on Friday, the brokerage house Edelweiss has said that stocks like Indian Railway Catering and Tourism Corporation (IRCTC), Zomato, SRF, Tata Power, Mindtree, Godrej Properties, and Mphasis could see the inclusion in the MSCI index. If all of the seven stocks present in Edelweiss' high conviction inclusion list, get included in the MSCI index then India can see the passive flow of around $1.3 billion, Edelweiss said in a note.

“As per Edelweiss Alternative Research, early assessment all the MSCI potential high conviction inclusion names holds a strong chance to move from current Midcap Categorization to Large-cap Categorization. While Zomato will be for a sure fresh entrant in Large-cap category," the note mentioned.

It is important to mention here that this stocks inclusion prediction is as per Edelweiss Alternative Research Analysis and not the final names announced by MSCI. The global index provider MSCI  rebalances its indices semi-annually and quarterly. The adjustment for its November semi-annual index rebalancing will take place on November 30 and the rejig will be with effect from December 1. MSCI is a global provider of equity, fixed income, hedge fund stock market indexes, multi-asset portfolio analysis tools and ESG products. It publishes the MSCI BRIC, MSCI World and MSCI EAFE Indexes.

Edelweiss report mentioned that Indian Railways' PSU IRCTC could see $171 million of inflows, followed by $153 million inflows in favour of newly listed Zomato. “Although these two stocks qualify for inclusion in the MSCI Standard Index any meaningful decline from current levels till the cut-off date in October could hamper their chances," Edelweiss said.

Asserting that Tata Power could be the largest beneficiary of inflows, with $240 million funds expected to come in favour of the company with an expected weightage of 0.5% in the index, the report said "We have been flagging off Tata Power from 135 levels and now if stock sustains above 185 levels, then it can very safely qualify for MSCI November Inclusion".

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