NEW DELHI, June 21 (ANI) —
India’s equity markets could attract net passive inflows of about $3.2 billion following the August 2026 review of the MSCI India Standard Index, according to a report by JM Financial Institutional Securities.
The report said the MSCI India Standard Index rebalancing—closely tracked by global passive investors—could drive significant fund flows into Indian stocks when changes take effect on August 31.
“On aggregate, the high-probability inclusions and exclusions could drive passive inflows into India of about $3.4 billion and outflows of approximately $159 million, resulting in a net positive passive inflow of roughly $3.2 billion,” the report said.
The brokerage noted that the review carries added importance as India’s weight in the MSCI Emerging Markets Index has declined over the past two years.
“With India’s weighting in the MSCI Emerging Markets Index decreasing drastically over the past two years, any incremental change (up or down) in the MSCI India Standard Index now carries meaningful flow implications,” the report added.
The MSCI India Standard Index review announcement is scheduled for August 12, with rebalancing set to take effect on August 31.
According to the report, Ather Energy and Steel Authority of India Ltd (SAIL) are leading candidates for inclusion in the index. JM Financial described both as medium-probability additions, noting they are close to meeting MSCI’s minimum free-float adjusted market capitalization threshold.
The report also highlighted potential upgrades from the MSCI Small Cap Index to the Standard Index, identifying Laurus Labs and Biocon as high-probability candidates.
“Both names have been identified for potential large-cap upgrades based on the recent surge in their market caps and liquidity metrics,” it said.
On the exclusion side, SBI Cards and Payment Services emerged as the only high-probability removal candidate.
“SBICARD screens as a high-probability removal,” the report said, citing persistent pressure on free-float market capitalization and structurally low liquidity.
The report added that investors typically position ahead of MSCI reviews, as index inclusions often lead to strong stock performance.
Historical data suggests high-conviction inclusion candidates can deliver 8–15 percent cumulative excess returns in the 20 trading days preceding MSCI announcements, it noted. (ANI)
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