Hyundai Motor India to be Added to MSCI India Index; Adani Green Energy to Exit

Hyundai Motor India Ltd is set to be included in the MSCI India Index, while Adani Green Energy will be removed from the benchmark, effective February 28, 2025. This update comes as part of the latest semi-annual review conducted by MSCI, a leading global index provider. The announcement was made on February 12, 2025, and is expected to influence market trends and investor sentiment.

Significant Index Reshuffle: Hyundai Gains, Adani Green Exits

The MSCI India Index, which is a crucial benchmark for institutional investors, will undergo changes in its constituents at the close of trading on February 28, 2025. According to the official statement by MSCI, Hyundai Motor India will be added to the index, reflecting the company's growing prominence in the Indian stock market, while Adani Green Energy will be excluded.

Following the announcement, Hyundai Motor India’s stock surged by 3.41% to Rs 1,898.20 on the Bombay Stock Exchange (BSE) during early trading. Meanwhile, Adani Green Energy witnessed a decline of 4.95%, dropping to Rs 896.90. However, Hyundai Motor India later lost its early gains, in line with the broader market trend, and traded lower as the day progressed.

What is the MSCI India Index and Why Does it Matter?

The MSCI India Index is a key benchmark used by global investors to gauge the performance of Indian equity markets. It consists of large and mid-cap stocks that meet specific liquidity and market capitalization criteria. Being included in this index often leads to increased foreign institutional investments, as funds tracking MSCI indexes adjust their portfolios accordingly. The removal of Adani Green Energy, on the other hand, could lead to outflows from the stock, affecting its valuation.

Changes in MSCI Global Small Cap Indexes

Apart from the MSCI India Index, the MSCI Global Small Cap Indexes will also undergo adjustments. A total of 19 companies will be added, while 19 firms will be removed from the index, effective February 28, 2025.

Companies Added to the MSCI Global Small Cap Index:

• Ola Electric Mobility

• Afcons Infrastructure

• Akums Drugs and Pharmaceuticals

• Allied Blenders

• ASK Automotive

• Black Box

• Cartrade Tech

• E2E Networks

• Greaves Cotton

• Jyoti CNC Automation

• Kovai Medical Center and Hospital

• Manorama Industries

• Pearl Global Industries

• Shaily Engineering

• Sundaram Clayton

• TBO Tek

• V2 Retail

• Websol Energy

• Zaggle Prepaid

Companies Removed from the MSCI Global Small Cap Index:

• Advanced Enzyme Tech

• Bajaj Hindusthan Sugar

• Balmer Lawrie

• D B Corp

• DCB Bank

• Fineotex Chemical

• Jai Corp

• Jamna Auto

• La Opala

• Magellanic Cloud

• Mahindra Logistics

• Sanghvi Movers

• Shivalik Bimetal

• Spandana Sphoorty Financial

• Sula Vineyards

• Sun Pharma Advanced Research

• VST Industries

• West Coast Paper Mills

Impact of the Index Changes on Market Trends

The inclusion of Hyundai Motor India in the MSCI India Index is expected to enhance investor confidence in the company and attract foreign institutional investments (FII). On the other hand, Adani Green Energy’s removal might lead to short-term volatility, as passive investors tracking the index adjust their holdings.

Meanwhile, changes in the MSCI Global Small Cap Indexes could have mixed effects on the stocks involved, with additions likely to witness increased buying interest and exclusions facing potential sell-offs.

Conclusion

The latest MSCI index reshuffle highlights shifting market dynamics, with Hyundai Motor India gaining prominence while Adani Green Energy faces exclusion. These changes, along with adjustments in the MSCI Global Small Cap Indexes, are likely to influence trading patterns and investment flows in the coming weeks. As the effective date of February 28, 2025, approaches, investors will closely monitor these developments for potential opportunities and risks.