MSCI February rejig: Added Aditya Birla Capital, L&T Finance; IRCTC excluded

MSCI has announced its latest index rebalance, which will take effect on February 27, 2026. According to an official statement, Aditya Birla Capital and L&T Finance will be added to the MSCI Standard Index, while Indian Railway Catering and Tourism Corporation (IRCTC) will be removed. Furthermore, AU Small Finance Bank is poised to increase its weighting following a float adjustment. Despite these changes, India’s overall representation in the MSCI Standard Index remains stable at 14.1 percent, although the total number of Indian voters will increase from 164 to 165, according to Nuvama Alternative & Quantitative Research.

Estimated inflow and outflow

According to Nuvama projections, the realignment will trigger significant capital movement:

• Aditya Birla Capital: Estimated inflows of $257 million
• L&T Finance: Estimated inflows of $238 million
• AU Small Finance Bank: estimated inflows of $172 million (due to weight gain)
• IRCTC: Estimated outflow of $141.6 million

Adjustments to the small cap index

The MSCI Smallcap Index will also undergo a substantial overhaul, with more than a dozen Indian stocks being removed. This will reduce the total number of Indian stocks in the Smallcap index from 508 to 480.

Several stocks will see outflows due to foreclosure, including Gokaldas Exports ($8.2 million), Sterlite Technologies ($5.8 million), KNR Constructions and J Kumar Infraprojects ($3.8 million each), VRL Logistics and Ashoka Buildcon ($3.5 million each), Anup Engineering ($3.4 million), Rajesh Exports ($2.7 million), and Heritage Foods, Shoppers Stop, Keystone Realtors and Dhanuka Agritech ($2.6 million) each), followed by Dilip Buildcon ($2.5 million).

New entrants to the Smallcap Index, on the other hand, expected to see inflows include Premier Energies ($15 million), National Securities Depository ($8 million), Emcure Pharmaceuticals ($7 million), JSW Cement ($6 million), Ashapura Minechem ($5 million), Canara HSBC Life Insurance ($5 million) and Thyrocare Technologies ($4 million).

Highlights from previous reviews

In the previous November review, Fortis Healthcare, GE Vernova, One 97 Communications (Paytm) and Siemens Energy were added to the Global Standard Index, while Container Corp and Tata Elxsi were removed. Disclaimer: The view and outlook shared are the property of the respective brokers/analysts and are not endorsed by Business Standard. Reader discretion is advised.