Laurus Labs and Biocon are emerging as the strongest contenders for inclusion in the MSCI India Standard Index, as per JM Financial. MSCI is scheduled to announce its latest index rebalancing on August 12 after market hours, with any changes taking effect from August 31.
According to JM Financial, the review could trigger an estimated $3.2 billion (or Rs 30,214 crore) of passive inflows into Indian equities.
Among the likely beneficiaries, Laurus Labs and Biocon have been assigned a high probability of moving from the MSCI India Small Cap Index to the MSCI India Standard Index. Such an upgrade typically attracts incremental inflows from global passive funds and exchange-traded funds that track MSCI benchmarks.
JM Financial estimates Laurus Labs could attract inflows of around $496 million (or Rs 4,683 crore) if it secures inclusion, while Biocon could see approximately $295 million (or Rs 2,785 crore) in passive flows.
Several other stocks are also on the radar. Apar Industries and Uno Minda have been assigned medium probabilities for a potential upgrade to the Standard Index, with estimated inflows of $261 million (or Rs 2,464 crore) and $205 million (or Rs 1,936 crore), respectively.
The brokerage also sees a medium probability of fresh inclusion for Ather Energy and Steel Authority of India Ltd. (SAIL), which could attract inflows of about $209 million (or Rs 1,973 crore) and $188 million (or Rs 1,775 crore), respectively. Meanwhile, Coforge, Max Financial Services, Glenmark Pharma and Thermax remain potential candidates but carry lower probabilities of inclusion, according to the brokerage.
MSCI index reviews are closely watched by investors because changes can drive significant trading activity and passive fund flows around the implementation date.
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