MSCI Rejig: Nykaa, Coromandel, Adani Energy shares likely to be included in India Standard Index; Thermax may exit
Nykaa, Adani Energy Solutions and Coromandel International shares are likely the top contenders for inclusion in the MSCI India Standard Index during its semi-annual rebalancing in May 2025.
According to brokerage firm JM Financial, the expected changes could lead to significant fund flows into certain stocks. The official announcement for MSCI index rejig is scheduled for May 13, post-market hours, with changes effective from June 3.
Among the expected inclusions, FSN E-Commerce Ventures, the parent company of fashion retailer Nykaa, stands out with a high probability of inclusion in the MSCI India Standard Index. The brokerage estimates potential inflows of $210 million, translating to 92 million shares, and a 12-day impact window.
Nykaa share price has already seen nearly 10% gain in the past month, possibly reflecting anticipatory buying ahead of the rebalancing. Nykaa shares have rallied 20% on a year-to-date (YTD) basis.
Other candidates for inclusion, albeit with low probability, are Adani Energy Solutions and Coromandel International. Adani Energy shares could see the largest inflow among the three — around $270 million, with a 10-day impact duration.
Coromandel International shares may attract inflows of $200 million, covering 7.6 million shares, as per JM Financial estimates.
On the exclusion front, Thermax shares are under the radar with a high probability of exclusion from the MSCI India Standard Index. The expected outflow is $120 million, impacting roughly 2.8 million shares, according to the brokerage firm.
MSCI index rebalancing often prompts large passive flows from global investors tracking the index. Stocks that are added or removed can experience significant price volatility and volume surges around the announcement and effective dates.
While Nykaa shares look poised for strong inflows, the inclusion of Adani Energy shares and Coromandel shares depends on factors such as free float adjustments and market cap thresholds. On the other hand, Thermax investors may brace for selling pressure if the exclusion materializes.
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