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Kotak Mahindra Bank to see largest inflows after MSCI rebalancing

2023-05-16

Kotak Mahindra Bank is set to receive the largest inflows following the quarterly rebalancing announced by MSCI. The index provider has increased the weighting of the private sector lender in its indices due to an increase in investment space for foreign portfolio investors (FPIs).

In a note, Nuvama Research said that Kotak Mahindra Bank's weighting in the index has increased by 135 basis points to 2.8%. This will result in inflows of $810 million (Rs 6,600 crore) from passive trackers. IIFL, meanwhile, projects inflows of $768 million (Rs 6,300 crore) as exchange-traded funds will have to buy 32.2 million shares of the lender due to the increased weighting.

Meanwhile, MSCI has announced three additions and as many deletions to its India index. The newly-added stocks to the index are Max Healthcare Institute, Hindustan Aeronautics (HAL) and Sona BLW Precision Forgings. As a result, Max Health is expected to see inflows of $280 million (Rs 2,300 crore), HAL $185 million (Rs 1,500 crore) and Sona $166 million (Rs 1,360 crore).

In addition, Adani Transmission, Adani Total Gas and Indus Towers have been removed from the index. The telecom tower company is expected to see outflows of $80 million (Rs 650 crore), according to analysts.

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