Public sector unit Rail Vikas Nigam’s (RVNL) shares swung into the spotlight on August 13 as the news spread that the PSU share will be included in the MSCI India Index. The reconstruction of the index has resulted in the inclusion of half a dozen stocks other than RVNL — Dixon Technologies, Vodafone Idea, Zydus Lifesciences, Oil India, Prestige Estates and Oracle Financial.
Part of a global index
The MSCI India index is a part of an index called MSCI Global Standard Index that is constructed with securities from 23 countries. It is operated from London. The changes will take effect from the close of trading on August 30, 2024, MSCI said in a statement.
RVNL upgraded to large cap
The RVNL stock has also been upgraded in the category of the large market capitalisation section of its Emerging Market India by the global index provider.
The rejig also discarded Bandhan Bank from the index. Data shows that RVNL shares closed 11% higher on August 12 as its inclusion in the MSCI Global Standards index was anticipated. Its shares have risen three-fold so far this year and the gains were recorded at 220%.
Huge inflow expected
Media reports said that Nuvama Alternative and Quantitative Research said inclusion of the railway stock in the index could result in an inflow of $219 million. India’s largest contract manufacturer in electronics Dixon Technologies could witness an inflow of $281 million. Vodafone Idea too can witness hectic buying in excess of $275 million.
Weightage of HDFC Bank to rise
Another stock which is in focus following this rejig is India’s largest private sector bank – HDFC Bank. The anticipation was that the weightage of this heavyweight stock would rise in MSCI indices from the current 3.8% to 7.2-7.5%.
According to reports, the weightage would take place in two phases. The first one will happen after the review that is being done currently and the second part will take place after the review in November.
RVNL shares were in focus after a technical breakout as news of the prestigious index spread on August 13. Bandhan Bank was the only share to be dropped. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
