MSCI August 2025 | Swiggy & Vishal Mega Mart Most Likely

Frontrunners for MSCI Standard Index Inclusion and Expected Inflows

Nuvama’s analysis has identified four key Indian companies that are highly likely to be added to the MSCI Standard Index during this review. Their inclusion is projected to attract significant foreign capital:

• Vishal Mega Mart: This rapidly expanding retail chain is predicted to garner the highest inflow, estimated at approximately $287 million. Its strong market performance and increasing free float have made it a prime candidate.
• Swiggy: The leading food delivery and quick commerce platform is another significant contender, with projected passive inflows of around $285 million. Despite recent market movements, Swiggy’s substantial market presence and liquidity continue to make it an attractive addition for global funds.
• Hitachi Energy India (formerly ABB Power Products and Systems India): A key player in the power infrastructure sector, Hitachi Energy India could attract inflows of approximately $240 million. Its robust growth aligns with increasing global investment in sustainable energy solutions.
• Waaree Energies: As a major player in the solar energy sector, Waaree Energies is expected to draw around $217 million in inflows. The global push towards renewable energy and Waaree’s expanding operations contribute to its strong eligibility.

These four anticipated inclusions alone are projected to bring a substantial combined inflow of approximately $1.03 billion into the Indian equity market. This highlights the profound impact of MSCI rebalancing on the liquidity and valuation of Indian stocks.

The Significance of MSCI Index Inclusion

Inclusion in a globally recognized index like the MSCI Standard Index is a pivotal event for any company. It typically triggers several positive effects:

• Increased Passive Inflows: Index funds and Exchange Traded Funds (ETFs) that benchmark against MSCI indices are obligated to purchase shares of newly added companies, leading to automatic demand and significant capital inflows.
• Enhanced Visibility and Liquidity: Being part of a global index elevates a company’s profile among international institutional investors, often resulting in increased trading volumes and improved liquidity for its shares.
• Positive Investor Sentiment: Index inclusion is frequently perceived as a strong validation of a company’s fundamentals and market standing, boosting investor confidence and attracting further active investments.
• Potential for Lower Cost of Capital: Over the long term, improved liquidity and investor confidence can contribute to a lower cost of capital for the company, facilitating future growth and expansion initiatives.

Historically, stocks added to major indices tend to exhibit price appreciation and increased trading volumes around the announcement and effective dates. While some of these gains might normalize post-effective date, the long-term impact on a company’s valuation and market perception remains significantly positive.

Anticipated Exclusions and Smallcap Index Adjustments

The MSCI review process also identifies companies for potential exclusion from the index. For the August 2025 review, Sona BLW Precision Forgings and Thermax are predicted to be removed from the MSCI Standard Index. These exclusions could lead to estimated outflows of approximately $186 million and $154 million, respectively.

In addition to the Standard Index, the MSCI Smallcap Index is also expected to undergo notable changes. Nuvama projects twelve high-conviction inclusions and four exclusions in this segment. Potential additions include Inventurus Knowledge, Capri Global Capital, Brainbees Solutions (FirstCry), Lumax Auto Technologies, Belrise Industries, Transrail Lighting, Ather Energy, CSB Bank, India Glycols, Lloyds Enterprises, Yatharth Hospital, and Zinka Logistics. These inclusions are expected to generate moderate inflows, generally ranging from $4 million to $12 million.

Notably, One 97 Communications (Paytm), despite meeting eligibility criteria earlier in the review period, is now expected to miss the August cut due to timing around the cut-off date. Its potential inclusion is likely deferred to the November 2025 review, where it could attract estimated inflows of $270 million.

Conclusion: A Dynamic Period for Indian Equities

The MSCI August 2025 rebalancing is poised to be a significant event for the Indian equity market. The anticipated inclusion of high-growth companies like Swiggy and Vishal Mega Mart, alongside established players such as Hitachi Energy India and Waaree Energies, underscores the increasing global investor confidence in India’s robust economic narrative. These changes are expected to drive substantial passive inflows, enhance market liquidity, and potentially influence the valuation of the included stocks. Market participants will be keenly awaiting the official announcement on August 7 to confirm these changes and strategically adjust their portfolios, as India continues to strengthen its position as a key emerging market destination for global capital.

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