MSCI tweaks its India index

By : BS Reporter
Last Updated: Thu, Nov 15, 2012 19:40 hrs

Divi’s Laboratories and United Breweries (UB) made their way into the MSCI India Index in the global index provider’s semi-annual review. While the two stocks replaced United Phosphorus and GMR Infrastructure on the index, MSCI also tweaked the weightages of several top stocks on the index.

Analysts estimate that Divi’s and UB could attract foreign institutional flows worth $40 million each as part of the index rejig effective November 30. About $20 million worth of overseas money could move out of United Phosphorous and GMR each due to the changes, they said.

Foreign institutional investors such as index and exchange traded funds widely track the MSCI indices.

The new weightage of companies in the tweaked MSCI India index
In % Weight Increase/Decrease
HDFC 8.24 0.75
Cairn India 1.21 0.63
HCL Tech 0.95 0.57
Divi's 0.35 0.35
Reliance Industries 7.89 0.11
Tata Motors 1.51 -1.45
UltraTech 0.54 -0.55
United Phosphorus 0.00 -0.20
Source: MSCI

MSCI has also announced change in weightages of several components on its India Index. These changes include significant reduction in weights of Tata Motors and UltraTech Cement, with additions in HDFC and Cairn India.

The weightage of Reliance Industries on the index will reduce by a slight 0.11 percentage points to 7.89 per cent. Shares of mortgage lender, HDFC, which will see a 0.75 percentage points increase in its weightage to 8.24 per cent, on Thursday rose 0.88 per cent to Rs 788.7 on the BSE. Meanwhile, Cairn India, which will see its weightage almost double to 1.21 per cent, on Thursday rose 1.61 per cent to Rs 337.40. Technology firm HCL Technologies, too, will see its weightage double to 0.95 per cent.

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