MSCI review: HAL, Ashok Leyland to be added to India Standard Index; shares rise

Q2 Earnings

As part of its semi-annual review, which was announced on May 11, 2023, global index services provider MSCI (Morgan Stanley Capital International) may add two possible India equities to its Standard Index.

According to brokerage Emkay, both Ashok Leyland and Hindustan Aeronautics meet the size and liquidity requirements through 23 March 2023, and it doesn’t currently anticipate any exclusions.

According to the statement, “We have evaluated the likely modifications to the MSCI India standard Index assuming price cut-off date of 23rd Mar 2022.”

On June 1, 2023, all modifications to its widely used stock indices will take effect.

Following its OFS in March, HAL, Ashok Leyland’s free-float market capitalization might rise by 3.5% (from 20.5 billion to 23.8 billion). According to Emkay, there is a strong likelihood that the price will be included in the MSCI India Index if it remains above 2370-2400 in the following two months.

Price support for the stock is located at 2290 and 2347 (200-DEMA) (February 23 low). On inclusion, a $102 million inflow is anticipated (3.9 times ADV).

Throughout the past six months, Ashok Leyland has traded in a wide range between 135 and 150. The stock barely meets the size requirements at the lower end of this range.

As a result, the brokerage stated that the Auto stock would continue to be a low probability inclusion candidate as long as it stays at these levels. On inclusion, an inflow of $104 million is anticipated (5 times ADV).

In Friday’s trading, HAL shares increased by close to 4% to 2,593.10 per share on the NSE. In the meantime, Ashok Leyland Ltd. stock rose 0.91 percent to 138.55 per share.

The largest India-focused ETF with a $5 billion market cap, the iShares MSCI India Exchange-Traded Fund, increased as high as 0.49 percent to 38.72 on March 23 but has down 7.59 percent so far this year.

The opinions and suggestions listed above are not Currency Veda’s rather, they represent the opinions of certain analysts or brokerage firms.