MSCI rejig could be non-event; this stock may replace IOC in Nifty, says Edelweiss

NEW DELHI: Index aggregator MSCI's forthcoming quarterly review of MSCI Standard Index might be a non-event for India, according to Edelweiss Securities in a note.

The brokerage does not expect any inclusion or exclusion in the forthcoming quarterly review. If anything, it expects slight weight adjustments in the existing constituents. The announcements, to be made on February 10 early morning (IST), will be implemented as of the close of February 28.

The brokerage noted that post the conversion of Reliance Industries' partly paid up shares to ordinary shares, the domestic Indices (Nifty and Sensex) have already made the adjustments and now it is likely that MSCI will take the same into account in the February review.

"The ballpark inflow could be $180-200 million, which is approximately 0.6-day average daily volume. It is a non-event in terms of impact," it said.

The same brokerage in a separate note said there is a very high probability of Apollo Hospitals replacing IOC in Nifty50 index. The cutoff date is January 31 and the announcement is likely by the third week of February. Adjustments, if any, will be effective from March 31.

"Despite recent price corrections in Apollo Hospitals, we believe that it will dislodge Indian Oil India from the Nifty50 Index. Apollo Hospitals could see inflow of $175 million which is 1.7 ADV, whereas IOCL could see an outflow of $100 million, which is 5.5 ADV," it said.

This brokerage continues to see Bank of Baroda replacing RBL Bank in Nifty Bank. BoB, it said, could see inflow of $63 million while RBL Bank could see outflow of $28 million, the brokerage said.