Ahead of the much-anticipated FTSE September rebalancing, a significant number of Indian stocks are expected to experience substantial passive inflows, according to analysis by Nuvama Institutional Equities. The rebalancing event, which adjusts the composition and weightings of various indices, is poised to bring fresh capital into several companies, while others may see minor outflows.
Expected Inclusions and Weight Increases
Among the companies predicted to benefit from inclusion or increased weight in the FTSE All Cap index, Cupid Ltd stands out, with Nuvama forecasting passive inflows of approximately $52 million. Other firms like Urban Company, Pine Labs, and Anthem Biosciences Ltd are also anticipated to attract between $32-38 million each if they are added to the index.
A broader group of stocks, including Meesho, Lenskart, Infosys, Groww, and Bharti Airtel, are expected to see their weights increased within the FTSE indices, potentially drawing a collective $58.81 million in passive inflows. Nuvama's probable list of additions to the FTSE All Cap index further includes ACME Solar, Avalon Technologies Ltd, SKF India, Emcure Pharma, Rubuicon Research, and Apollo Micro Systems Ltd.
Beyond these, companies such as ICICI Prudential AMC, Adani Enterprises, Belrise Industries, IndusInd Bank, Cochin Shipyard, and JSW Infra are also projected to experience a rise in their respective weights, signaling increased investor interest through passive funds.
Anticipated Exclusions and Weight Reductions
Conversely, some Indian companies are likely to face exclusions or reductions in their index weights. Whirlpool of India, Bata India, and Relaxo Footwears are expected to be removed from the FTSE All World index, though Nuvama suggests these exclusions will lead to insignificant outflows.
Similarly, Route Mobile, Rajesh Exports, and Orient Cement may be excluded from the All Cap index. Furthermore, Biocon, Wipro, Aadhar Housing Finance, Star Health, Metro Brands, and IndiaMART are among the companies predicted to see a cut in their weights due to the FTSE rebalancing, potentially leading to some passive fund outflows.
These adjustments underscore the dynamic nature of global indices and their direct impact on the investment landscape for publicly traded companies, as passive funds align their portfolios with the updated index compositions.