Bajaj Fin, IndusInd Likely to Get Berth in MSCI India
Among other key contenders, 1,000 crore of foreign money may flow into these stocks
Mumbai: Titan Company, Bajaj Finance, Petronet LNG, IndusInd Bank and Indian Oil Corporation are emerging as key contenders for positions in the MSCI India index — an emerging market index widely tracked by global funds.
The next quarterly tweaking of the MSCI India index will be announced on May 12 which will effective from June 1, 2016. An inclusion in the MSCI India index would mean that several passive funds will deploy funds in proportion to the weightage assigned to the stocks in the MSCI index.
“Shares such as Bajaj Finance, IndusInd Bank, Petronet LNG and Indian Oil Corporation have large investor interest, while some these stocks are looking attractive on fundamental basis,” said AK Prabhakar, head of research at IDBI Capital. “We have ‘outperform’ rating on IndusInd Bank and have price target of ₹ 1258 – 1400 in the medium term. For Petronet LNG, we expect the stock to rise to ₹ 290.”
Shares of Bajaj Finance have risen about 75% in past one year, while IndusInd Bank has gained 27%. Both these stocks have outperformed the ET Bank Index which has risen 18% over the same period. Petronet LNG has surged 55% over past 12 months and Indian Oil Corporation has gained 29%. Both these stocks have outperformed the ET Oil & Gas index that has gained 12.7%. Exchange traded funds (ETFs) create their portfolios as per the weightages of stocks in the MSCI indices. One of the major followers of the MSCI index is iShare’s MSCI India ETF which has net assets of almost $3.5 billion as on April 25, 2016. Apart from iShares, there are many other global funds that follow the MSCI. Analysts estimates nearly ₹ 1,000 crore of additional foreign fund flows into these companies. “We expect some of the commodity and consumption names to feature in MSCI India index,” said Pankaj Pandey head of research at ICICI Direct. “We expect some foreign funds to chase stocks in commodity and consumption names going ahead.” The MSCI India index is designed to measure the performance of the large-cap and mid-cap segments of the Indian market. Currently, there are 73 constituents in the index that covers approximately 85% of the Indian equity universe.