As Morgan Stanley Capital International (MSCI) is expected to announce its rejigged MSCI India Standard Index on August 12, the review will result in passive inflows into Indian equities at an estimated Rs 30,214 crore, a new report has said.
Laurus Labs and Biocon are emerging as the strongest contenders for inclusion in the new index, which is expected to take effect from August 31, the report from JM Financial said.
The brokerage has assigned a high probability of Laurus Labs and Biocon moving up from the MSCI India Small Cap Index to the MSCI India Standard Index, which will attract incremental flows from global passive funds and ETFs tracking MSCI benchmarks.
Laurus Labs could see inflows of around Rs 4,683 crore, while Biocon may attract nearly Rs 2,785 crore, the brokerage estimated.
Apar Industries and Uno Minda are other stocks with medium probabilities of upgrade into standard index, with potential inflows of Rs 2,464 crore and Rs 1,936 crore, respectively, the report said.
Analysts said the MSCI index rebalancing likely amplified volatility during the final 30 minutes of trading in the last trading day of May, contributing to the steep late-session decline.
Investors and traders keenly monitor MSCI index reviews as changes can drive significant trading activity and passive fund flows around the implementation date.
Foreign institutional investor (FII) outflows of nearly $18 billion in 2025 have left India underweight in many portfolios, creating scope for selective inflows if emerging market sentiment improves.
Around 75 per cent of the MSCI Emerging Markets index is concentrated in just four markets — China, India, Korea and Taiwan.
Under MSCI’s market classification announced in June, 23 countries and cities are classified as developed markets, while 24 others, including South Korea, Taiwan, China, India and Mexico are categorised as emerging markets.
