MSCI has announced its May 2026 index rejig, adding four Indian stocks, including MCX and Indian Bank, to the MSCI Standard Index while removing an equal number of names such as RVNL and Kalyan Jewellers, keeping India’s overall weight broadly unchanged. The changes, effective at the close of trade on 29 May, come alongside a sharp clean-up in the MSCI Small Cap universe, where over a dozen Indian stocks are set to be excluded.
MSCI Standard Index: Adds and exits
MSCI’s official announcement for its May 2026 review confirms that four Indian companies will be included in the MSCI Standard Index and four will be excluded, with the total number of Indian constituents steady at 165.
New additions to the index include Federal Bank, MCX, NALCO, and Indian Bank, while Adani Power, BPCL, Nykaa, Trent, and OFFS will see weight increase.
On the other hand, Hyundai Motor, Jubilant Food, Kalyan Jewellers and RVNL have been moved out of the index.
According to Nuvama Alternative & Quantitative Research, the index changes are “broadly in line” with its earlier predictions, indicating limited surprise for passive flows at the aggregate level.
India’s weight in the MSCI Standard Index will remain largely stable at 12.3 per cent versus 12.4 per cent earlier, despite the churn in individual names. “MSCI’s official announcement for the May 2026 review is out, and the adjustments are broadly in line with Nuvama Alt’s predictions,” the brokerage noted in its report.
Within the headline changes, Multi-Commodity Exchange of India (MCX) and Indian Bank are among the key inclusions, positioning them to attract incremental foreign passive inflows as global funds realign portfolios to the new MSCI composition. On the other side, Rail Vikas Nigam Ltd (RVNL) and Kalyan Jewellers are among the stocks moving out of the MSCI Standard basket, which could trigger passive selling as index trackers adjust holdings post-rejig.
Small Cap index sees deeper churn
Beyond the flagship Standard Index, MSCI has also announced a significant reshuffle in its Small Cap Index, where Indian stocks have come under pressure amid a broader reset in the segment. Nuvama pointed out that the Indian small-cap universe will see “over a dozen exclusions,” with the total India stock count in the MSCI Small Cap Index dropping from 474 to 459 after the rejig.
Smallcap inclusions include IREDA, Anthem Biosciences, Fractal Analytics, Pine Labs and Emmvee Photovaltaic while exclusions are Cello World, Redtape, Raymond Lifestyle, Indigo Paints, Balu forge and Blue Jet Healthcare.
The brokerage highlighted that the move reflects the sustained pressure on small-cap names and MSCI’s simultaneous implementation of changes to its free-float calculation methodology. “As the small-cap universe remained under pressure, the index will see over a dozen exclusions in India, with the stock count reducing from 474 to 459 post-rejig,” Nuvama said. While the report does not detail each small-cap inclusion and exclusion in the text, it notes that “several changes” have been carried out and are captured in the accompanying index tables.
Float methodology tweak drives weight moves
Alongside the stock additions and deletions, MSCI has implemented changes to its float calculation methodology, which has led to multiple weight adjustments across Indian names in its indices. These technical tweaks, applied concurrently with the May review, can influence stock-level passive flows even where a company remains within the same index, as funds tracking MSCI benchmarks rebalance to the revised free-float weights.
Nuvama flagged that the float methodology change is an important layer in this review cycle and may result in non-trivial rebalancing volumes, particularly in counters where effective free float has been significantly revised. However, at an aggregate level, the impact on India’s country weight in the MSCI Standard Index appears marginal, with the headline allocation almost unchanged post-rejig.
All the announced changes will be implemented at the close of trading on 29 May 2026. Historically, the bulk of passive flows linked to MSCI reviews tend to cluster around the effective date as global index funds execute their rebalancing trades.
In the meantime, MSCI has also said Adani Energy Solutions will not be added To MSCI Indexes as part of the May review.
