MSCI Standard Index Quarterly Review is one of the most closely watched rebalancing events of the year globally as well as for India-specific passive and quasi-passive institutional investors, the domestic brokerage said, adding that after India’s weight in the MSCI Emerging Markets Index decreased drastically over the past two years, any incremental change (up or down) in the MSCI India Standard Index now carries meaningful flow implications, particularly given the significant AUM benchmarked or linked to MSCI indices globally.
The MSCI India Standard Index rebalancing announcement is scheduled for August 22, and the May 2026 rejig could see as many as 12 inclusions and one exclusion with an estimated inflow of $3.2 billion, as per JM Financial. The changes to the global indices will take effect on August 31.
Key inclusion candidates
According to the domestic brokerage’s analysis, Ather Energy and Steel Authority of India (SAIL) are medium-probability additions to the MSCI India Standard Index at this review cycle. It highlighted that both these stocks are close to adequate free-float adjusted market cap above MSCI’s minimum size threshold.
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JM Financial named Lenskart and Schaeffler India as low-probability candidates, and their inclusion hinges on continued free-float adjusted market cap improvement over the remaining observation period.
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Key migration candidates
Laurus Labs and Biocon were listed as high-probability candidates to migrate to the MSCI India Standard Index from Small Cap Index at this review cycle. Both names have been identified for potential large-cap upgrades based on the recent surge in their market caps and liquidity metrics, the domestic brokerage said.
Apar Industries, UNO Mindra and Glenmark were named the medium-probability candidates, while Coforge, Thermax and Max Financial were listed as low-probability migrations.
Key exclusion candidates
JM Financial meanwhile said that SBI Card was seen as a high-probability removal. “It has seen persistent deterioration in free-float market cap owing to fundamental pressures and structurally low free-float, dragging it below the minimum size or liquidity threshold stipulated for continued index membership,” it added.
“On aggregate, the high-probability inclusions and exclusions could drive passive inflows into India of about USD 3.4bn and outflows of approximately USD 159mn, resulting in a net positive passive inflow of roughly USD 3.2bn. These estimates are indicative and assume no concurrent changes in country-level weights or EM index rebalancing,” the domestic brokerage concluded.
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