FTSE Rejig: Global index provider Financial Times Stock Exchange (FTSE) has included five Indian companies to its FTSE Emerging Markets All Cap Index as part of its May 2026 index review.
Companies such as Lenskart, Groww, Tata Capital, ICICI Prudential AMC and LG India have been added to index. In addition to incuding these companies the weightage for Bharti Airtel has been increased with estimated inflows up to $51 million, while the weightage for Reliance Industries has been reduced with estimtated outflows of $63 million, according to JP Morgan.
Lenskart is projected to bring $84 million inflows, while Groww is estimated to see inflows of $78 million, followed by ICICI Prudential AMC with $64 million, and LG India with $61 million.
The FTSE Emerging All Cap Index is a market-capitalisation weighted index highlighting the performance of large, mid and small cap stocks in emerging markets. A rejig in such an index is a key event for the market as they help investors to determine the direction in which the funds are moving.
When an index is reorganised, exchange-traded funds (ETFs) and mutual funds that track that index perform a rebalancing exercise. This is crucial for them to re-align their portfolios with the new composition of the index.
Essentially, the index's constituents are adjusted to maintain the intended asset allocation proportions or to keep the overall risk level consistent with the index's predefined methodology.
The rebalancing activity usually begins days before the date the changes are implemented.
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