Indian Stock Market Set for $1.4-$1.6 Billion Inflows as FTSE Rebalances Index

The Indian stock market is expected to witness significant foreign inflows of $1.4 billion to $1.6 billion on March 21 as global index provider FTSE implements its semi-annual rebalancing. These changes, effective after market hours today, will lead to the inclusion of several Indian stocks in the FTSE All-World Index, attracting fresh investments.

Major Additions to the FTSE All-World Index

A total of 14 Indian stocks are set to be added to the FTSE All-World Index, boosting their visibility among global investors. These additions could trigger substantial buying activity as fund managers adjust their portfolios.

Newly Added Stocks:

360 ONE WAM ($25.6 million expected inflow)

Ajanta Pharma ($23.8 million)

Apar Industries ($5.6 million)

Bajaj Housing Finance ($48.4 million)

Blue Star ($8.3 million)

BSE ($10.4 million)

CDSL (Central Depository Services India) ($8.0 million)

CRISIL ($8.1 million)

Fertilizers and Chemicals Travancore

Fortis Healthcare ($24.1 million)

IndusInd Bank ($25.5 million)

Kaynes Technology India ($6.9 million)

National Aluminium (NALCO) ($14.0 million)

Premier Energies ($22.2 million)

Stock Removed from FTSE All-World Index

While several Indian stocks gained entry into the index, Nexus Select Trust was removed, leading to an estimated outflow of $54.6 million as investors rebalance their holdings.

Key Stocks Benefiting from Weight Upgrades

Apart from new inclusions, some major stocks already part of the FTSE All-World Index have received weight increases, making them more attractive to institutional investors.

Stocks with Higher Weightage & Expected Inflows:

ICICI Bank – $426.9 million

Kotak Mahindra Bank – $155.2 million

Zomato – $65.0 million

Cipla – $30.4 million

ITC Hotels – $11.2 million

Aditya Birla Fashion & Retail – $9.5 million

Mankind Pharma – $16.0 million

Godrej Properties – $45.0 million

ICICI Bank to See Maximum Inflows

ICICI Bank is set to benefit the most, with a massive inflow of $426.9 million. The surge in investment is partly driven by the merger between ICICI Securities (ISEC) and ICICI Bank, with ISEC shares trading for the last time on March 21. As part of the merger, ICICI Securities shareholders will receive 67 ICICI Bank shares for every 100 shares they hold.

Bajaj Finance Faces Downgrade

While several stocks gained from the rebalancing, Bajaj Finance saw a weight downgrade, which could lead to an estimated $41.2 million outflow.

FTSE All-Cap Index Additions

Apart from changes in the FTSE All-World Index, some stocks have been added to the FTSE All-Cap segment, further expanding India’s representation in global benchmarks.

New Additions to FTSE All-Cap Index:

JSW Holdings

Sanofi Consumer Healthcare India

Gland Pharma

Pricol

Brookfield India Real Estate Trust

Triveni Engineering

Shilpa Medicare

Raymond Lifestyle

Impact of FTSE Rebalancing on Indian Markets

The FTSE semi-annual rebalancing plays a crucial role in attracting global funds to Indian stocks. With $1.4-$1.6 billion in inflows expected, the markets could experience higher liquidity and buying momentum in the coming days.

Experts believe that this rebalancing, combined with increased weightages for key stocks like ICICI Bank and Kotak Mahindra Bank, will further strengthen India’s position in global investment portfolios.

Key Takeaways:

Indian stock market to receive $1.4-$1.6 billion in inflows on March 21.

14 Indian stocks added to FTSE All-World Index.

ICICI Bank to get the highest inflows ($426.9 million).

Nexus Select Trust removed, leading to $54.6 million outflow.

Bajaj Finance faces weight downgrade with $41.2 million outflows.

JSW Holdings, Gland Pharma, Raymond Lifestyle, and others join FTSE All-Cap Index.

With these changes, Indian equities are set to benefit from increased foreign institutional interest, potentially driving market sentiment in the coming weeks.