Global index provider MSCI has announced a significant reshuffle of its Global Standard Indexes, with the inclusion of four India-listed companies set to bring substantial foreign capital into the Indian stock market. The additions, which include fintech major Paytm (One 97 Communications), Fortis Healthcare, GE Vernova T&D India, and Siemens Energy India, took effect on November 24, following MSCI’s quarterly review.

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Estimated Inflows and Market Confidence

The inclusion of these four companies is a major positive for Indian equities. According to estimates from brokerage Nuvama, the adjustment is expected to trigger passive fund inflows of nearly $1.46 billion into these stocks. This capital injection underscores the growing confidence global institutional investors have in the resilience and potential of the Indian market.

MSCI indexes are critical benchmarks for investors worldwide, with trillions of dollars in assets benchmarked against them. Consequently, even minor changes in the index composition can lead to large-scale cross-border capital movements, directly impacting the demand for the included stocks.

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Index Exclusions and Overall Weight

While new entries celebrated their inclusion, two prominent Indian firms were removed from the flagship Global Standard Indexes: IT services company Tata Elxsi and logistics giant Container Corporation of India. These exclusions are projected to lead to outflows of an estimated $162 million and $146 million, respectively, as funds tracked to the index divest their holdings.

Despite the removals, the overall influence of India on the global index has increased. Following this update, India’s weight in the MSCI Standard Index rose marginally from 15.5% to 15.6%, reflecting the continued strengthening of the nation’s position in global equity benchmarks.

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Small-Cap Segment Restructuring

MSCI also updated its Global Small-Cap Indexes. The segment witnessed six additions from India but also saw 30 stocks removed. The higher number of exclusions was primarily due to MSCI raising the global minimum market capitalization requirement for index eligibility. India reportedly had the second-highest number of small-cap removals globally after the United States.