MSCI Index Review May Bring Over Rs. 30,000 Crore into Indian Stocks: Report





New Delhi: India's equity markets could witness passive inflows of more than **?30,000 crore** following the upcoming review of the **MSCI India Standard Index**, according to a report by JM Financial.

Morgan Stanley Capital International (MSCI) is scheduled to announce the revised index on **August 12**, with the changes expected to take effect from **August 31**.

The report identifies **Laurus Labs** and **Biocon** as the strongest candidates for inclusion in the MSCI India Standard Index, replacing their current position in the MSCI India Small Cap Index. Their inclusion is expected to attract fresh investments from global passive funds and exchange-traded funds (ETFs) that track MSCI benchmarks.

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JM Financial estimates that Laurus Labs could receive inflows of around **₹4,683 crore**, while Biocon may attract nearly **₹2,785 crore**.

The brokerage has also assigned a medium probability of inclusion to **Apar Industries** and **Uno Minda**, which could potentially see passive inflows of **₹2,464 crore** and **₹1,936 crore**, respectively.

Overall, the MSCI index reshuffle is expected to generate passive inflows of approximately **₹30,214 crore** into Indian equities.

Market experts noted that MSCI's periodic index rebalancing often leads to heightened trading activity. They believe the sharp volatility witnessed during the final half-hour of trading on the last trading day of May was partly driven by positioning ahead of the index review.

MSCI reviews are closely tracked by investors because any change in index composition typically triggers large-scale buying or selling by passive investment funds on the implementation date.

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The report also pointed out that foreign institutional investors (FIIs) have pulled out nearly **$18 billion** from Indian equities so far in 2025, leaving many global portfolios underweight on India. This creates room for selective inflows if investor sentiment towards emerging markets improves.

Currently, around **75 per cent** of the **MSCI Emerging Markets Index** is concentrated in four markets—China, India, South Korea and Taiwan.

According to MSCI's latest market classification released in June, **23 countries and cities** are categorised as developed markets, while **24 markets**, including India, China, South Korea, Taiwan and Mexico, continue to be classified as emerging markets.
 

 

With inputs from IANS

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