Polycab, Paytm & Lodha among stocks likely to enter MSCI Global, draw $900-m inflows

Mumbai: Fintech major Paytm, Mumbai realtor Lodha and Tata Motors DVR are among the stocks that could be included in the MSCI Global Standard Index, a Nuvama report said, ahead of a scheduled recast of the gauge tracked by investors that could put in as much as $900 million into top 5 shares being added to the gauge.

Others likely to feature in the index and benefit from global passive fund inflows are Polycab India and Tata Communications, wealth firm Nuvama Alternative & Quantitative Research said.

Stocks such as Persistent Systems, APL Apollo Tubes, Suzlon Energy and Jindal Stainless will likely be shifted from the Smallcap index to the Standard index, as per Nuvama.

MSCI will announce the changes in constituents for the MSCI global standard indices on November 14 or 15. The final changes will take place on November 30.

In the event of their inclusion, Polycab India, which has seen a remarkable 72% surge in the past six months, could potentially see an influx of ₹1,600 crore or approximately $194 million. The inclusion of Tata Motors DVR, Tata Communications, Macrotech Developers (Lodha), and One97 Communications (Paytm) may also lead to passive fund investments of about ₹1,400 crore each.

Tata Motors DVR has demonstrated an impressive 84% surge in the last six months and a 120% increase over the past year. Similarly, Microtech Developers has witnessed a substantial gain of 78% in the past six months.

"Since the beginning of August 2023, we have consistently highlighted probable MSCI names in multiple instances," said Abhilash Pagaria, head - Nuvama Alternative & Quantitative Research. "The global cut-off period spans from October 18th to 30th. We expect the selection day to happen in the initial few days of the cut-off period itself."

Shares of Persistent Systems and APL Apollo Tubes will likely be relocated from the MSCI Smallcap Index to the MSCI Standard Index. In the event of this transition, these stocks may witness an influx of approximately ₹1,900 crore each. Additionally, Suzlon Energy and Jindal Stainless are among the other two stocks expected to move from the Smallcap to the Standard Index.

Suzlon Energy, which has experienced a remarkable 289% rally in the past year, could potentially attract an inflow of ₹1,600 crore. Meanwhile, Jindal Stainless, with a notable 277% surge over the past year, may see an inflow of ₹1,200 crore.

MSCI indices are widely tracked globally, with several passive funds replicating their portfolios according to the stock weightages of its indices. These funds will be forced to buy or sell the stocks if the stock's weight in the index is increased or reduced.