Mumbai, November 25 – In a significant development that underscores India's growing prominence in global financial markets, MSCI Inc. (Morgan Stanley Capital International) has included five Indian companies in its MSCI Global Standard/Emerging Market (EM) Index. Among the notable additions are Voltas, Oberoi Realty, Bombay Stock Exchange (BSE), Alkem Laboratories, and Kalyan Jewellers.

This move is expected to attract approximately $2.5 billion in passive inflows from foreign institutional investors (FII) into the Indian economy, marking a significant milestone for the country.

A Rising Presence in Global Markets

The rejig, announced on November 6 and effective from November 25, has not only added to India’s tally but also increased its weight in the MSCI EM Index. With this update, India’s representation will rise from 19.3% to 19.8%, the highest increase among all emerging markets during this cycle.

“India’s growing influence in the MSCI Emerging Market Index is a testament to its robust economic foundation and thriving corporate landscape,” said Abhilash Pagaria, Head of Nuvama Alternative & Quantitative Research.

Currently, China leads the MSCI EM Index with a weight of 27% and 598 constituents. However, India’s rise signifies its burgeoning role in shaping global investment flows.

An Opportunity for Small-Cap Growth

India’s success is not limited to large-cap indices. In the MSCI India Domestic Small Cap Index, 13 new companies have been added, including Eureka Forbes, Aadhar Housing Finance, and PC Jeweller, bringing the total count to 525. These additions are anticipated to amplify investments in India’s small-cap sector, driving further growth and innovation.

Challenges for High-Profile Firms

However, not all companies managed to secure their position. Adani Energy, for instance, was excluded due to a show-cause notice issued by SEBI over potential misclassification of shareholding. This highlights the evolving regulatory landscape and the importance of transparency in corporate governance.

The Road Ahead for India

India’s increased representation in the MSCI EM Index is more than just a number—it reflects a global vote of confidence in the country’s economic potential. Pagaria remarked, “With active participation from mutual funds and retail investors, India is positioned for a brighter future. We are merely at the tip of the iceberg in terms of our inclusion in global indices.”

As India strengthens its foothold in international markets, the inclusion of these companies stands as a milestone, paving the way for further growth, innovation, and international recognition.