AU Small Finance Surges on MSCI Inflow; L&T, AB Capital Added to Global Index

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Overview

AU Small Finance Bank shares are drawing attention after its weight is set to increase in the MSCI Global Standard Index. Analysts predict around $172 million in foreign inflows for the lender following this adjustment. L&T Finance Holdings and Aditya Birla Capital have been added to the index, while IRCTC faces exclusion.

The MSCI Global Standard Index rejig, set to take effect in the final minutes of trading on February 27, will see AU Small Finance Bank Ltd. witness a significant weight increase. This adjustment, driven by a float adjustment, is projected to attract approximately $172 million in foreign fund inflows, equivalent to about 15.6 million shares, according to Nuvama Alternative and Quantitative Research.

New Additions and Exclusions

The index reshuffle also incorporates L&T Finance Holdings and Aditya Birla Capital into the prestigious global benchmark. Conversely, Indian Railway Catering and Tourism Corporation (IRCTC) has been removed from the index, with Nuvama estimating potential outflows of around $142 million from this move.

India's Index Representation

Despite these individual stock movements, India's overall weight within the MSCI Standard Index remains stable at 14.1%. The total number of Indian companies featured in the index will increase from 164 to 165. AU Small Finance Bank concluded its previous trading session with a marginal dip of 0.4%, closing at ₹1,000.85 per share. The lender's stock has performed strongly over the past year, delivering a significant 75.4% return.

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