MSCI Reduces Weights Of These 15 Nifty Stocks, Including Infosys, Reliance, HDFC

The weights of total fifteen Nifty50 stocks were reduced by the MSCI Global Standard Index on Thursday as part of its May Global Index. MSCI decided to offload two of Adani Group stocks as well.

Apart from Adani Total Gas and Adani Transmission, MSCI reduced the weights of Infosys, Tata Consultancy Services, Tech Mahindra, and Mphasis, according to The Economic Times report. The weights of Reliance Industries, Bajaj Finance, Hindalco Industries, Bharat Petroleum Corp, JSW Steel, Divi's Laboratories, ICICI Bank, HDFC Ltd, Dr Reddy's Laboratories, Hindustan Unilever, Shree Cement, and Axis Bank were also cut.

MSCI reduced Infosys' weight by 22 basis points which will result in net outflows of $134 million. RIL's weight has been reduced by 26 basis points, which will see net outflows of about $155 million, BPCL's weight has been cut by just 6 bps, which may trigger outflows of about $38 million.

The exit of Adani Transmission and Adani Total Gas from the MSCI Global will result in an outflow of $201million and $186 million. While the cut in weights of ICICI Bank, Axis Bank, and HDFC will lead to cumulative outflows of a little over $200 million, as per the Nuvama Alternative Quantitative Research estimates. The resultant total net outflow will likely be around $1 billion.

However to replace the 15 stocks whose weights were reduced, MSCI increased the weightage of eight index stocks namely, Kotak Mahindra Bank, Mahindra & Mahindra, Maruti Suzuki India, Cipla, Oil and Natural Gas Corp, UltraTech Cement, NTPC, and Power Grid Corp of India.

Kotak Bank was increased by 135 bps in terms of the weightage, which alone will bring net inflows of over $800 million.The increase in the weight of other index stocks will result in net inflows of around $400 million.

Apart from the index stocks, Zomato, YES Bank, Samvardhana Motherson, and TVS Motor also saw an increase in their weights. Zomato's weight has been increased by 10 bps, which may see FII inflows of around $60 million.