Indian equities are anticipated to receive approximately $2 billion in passive inflows following a significant adjustment in the MSCI Emerging Markets (EM) Index. India's weight in the index has been raised from 11.5 percent to 11.7 percent as part of MSCI's November 2026 review, a change expected to take effect on November 20.
According to initial estimates by Nuvama, a financial services firm, this rebalancing will lead to substantial passive buying across several Indian stocks. Coforge Ltd. is projected to be the largest beneficiary, attracting an estimated $630 million in inflows, equivalent to approximately 2.9 crore shares. Life Insurance Corporation of India (LIC) is also expected to see significant passive buying, totaling around $468 million.
Key Beneficiaries and Inflows
- Coforge Ltd.: $630 million
- Life Insurance Corporation of India (LIC): $468 million
- Adani Green Energy Ltd.: $348 million
- Meesho Ltd.: $307 million
Other companies poised to experience inflows, though smaller in scale (up to $97 million each), include Billionbrains Garage Ventures Ltd. (Groww), Lenskart, JSW Steel, Coal India, One 97 Communications Ltd. (Paytm), and Vedanta Ltd. These inflows are attributed to an increase in their respective weights within the index.
Index Changes and Outflows
The MSCI EM Standard Index will see four new inclusions and one exclusion, bringing its total constituents to 168, up from 165. Nuvama noted that these changes largely align with their expectations, with ICICI Prudential Life notably avoiding exclusion due to its maintained float factor.
Conversely, some stocks are expected to face outflows. PI Industries, which is slated for exclusion from the index, may experience passive outflows of $119 million. Other companies likely to see outflows ranging from $45 million to $97 million include NTPC, Eicher Motors, Hindustan Aeronautics Ltd., and Grasim Industries.
The MSCI EM Small Cap Index is also undergoing significant restructuring, with 11 additions and 29 exclusions. This will reduce its total constituents from 450 to 432. Nuvama attributed many of these exclusions to sharp price declines and increased volatility observed towards the end of October.