Vishal Mega Mart would likely drive the net inflow in Indian equities after its inclusion in the post-rejig FTSE Russell's global equity indices on Friday, June 20. A total of nine stocks have made a cut in the index, which is expected to result in a total net inflow of $150mn in India, according to a report by Nuvama. Of this, Vishal Mega Mart alone is expected to amass $115mn.
Other companies’ stocks that will be the part of the index are Hyundai Motor India, Waaree Energies, Swiggy, NTPC Green Energy, and four others. The Creta-maker’s inclusion in the index will likely lead to a net inflow of $56mn, while Waaree Energies will see an inflow of $49mn, the report said. Swiggy and NTPC Green Energy cumulatively are expected to get an inflow of $54mn.
Beyond these additions, the June rejig also includes the rebalancing of weightage of the stocks that are already a part of the index. According to the Nuvama’s report, FTSE index will see higher weight for 14 Indian stocks from June 23. Of these stocks, Reliance Industries, Bharti Airtel, Mahindra & Mahindra, and Power Grid are expected to see higher net inflows—a cumulative $150mn.
As many as 25 stocks will have their weights slashed in the index, which will drive outflows in these stocks. Titan Company, Adani Enterprises, JSW Steel, Asian Paints, and Grasim are the Nifty 50 stocks which will see a fall in weightage in the FTSE index. These five stocks will likely see an outflow of $118mn due to the rejig.
Meanwhile, ITC Hotels, the demerged hotels arm of ITC, will be shifted to the midcap segment from the largecap segment. Also, 18 stocks are set to enter the microcap segment of the FTSE Russell indices.
Shares of all these companies that either got included or had their weights changed reacted to the development on June 20 in anticipation of future fund flow direction. The rise in the share prices of stocks that were included came on the back of hopes of higher order inflows, following the rejig.
