MSCI’s index rejig will add 14 Indian smallcap stocks to its smallcap index, with potential inflows of about $135 million. Some firms face pressure: Jubilant Foodworks and Kalyan Jewellers are set for net outflows after exclusion from the MSCI Standard index. Meanwhile, names such as Escorts Kubota and IREDA could attract sizable inflows from index funds tracking MSCI.
MSCI has announced major changes to its indices, naming Federal Bank, Indian Bank, Multi Commodity Exchange of India and Nalco for inclusion in the Global Standard Index. The additions are expected to attract meaningful inflows as index-linked funds rebalance. However, Adani Energy Solutions has been excluded after MSCI flagged surveillance concerns.
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MSCI has decided not to add Adani Energy Solutions to its global standard indexes in the May 2026 review. The move follows the stock being placed on an “Ineligible Alert Board” under India’s ASM surveillance framework. MSCI says securities covered by short-term or long-term ASM measures will not be added to its Investable Market Indexes during periodic reviews.
MSCI’s May 2026 index rejig will reshuffle India constituents without changing the country’s overall count in the MSCI Standard Index, which stays at 165 stocks. MCX and Indian Bank are added, while Rail Vikas Nigam Limited and Kalyan Jewellers are removed, effective after market close on May 29. MSCI also plans a broader small-cap cleanup with more than a dozen exits.
India’s weight in the MSCI Emerging Markets Index has fallen to levels seen during the Covid-19 period, dropping from second place to fourth. The shift is tied to global outflows rerouting toward AI-led markets, including Taiwan, which is drawing more investor attention and changing the index’s relative country weightings.
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