Will HAL make the cut for MSCI index inclusion in the May review?

The brokerage said, based on its calculations and understanding of methodology, HAL holds a high chance to get included in the May 2023 review, provided the stock trades above Rs 2,650. The current assumption is as per the latest global cap cut off calculations.

If indeed, the stock gets included in the index, the inflows will be close to $140 million which is close to 4.6 million shares, Nuvama said.

On Thursday, Hindustan Aeronautics was trading flat, with a marginal downward bias, at Rs 2,683.90 apiece on NSE. In the last one year, the stock has risen by a massive 93%. while it is up about 5% so far this year.

According to trendlyne data, HAL has an average target of Rs 3075, which shows an upside of 14.24% from the last traded price.

Hindustan Aeronautics has an order book position of Rs 84,000 crore and another Rs 50,000 crore worth of orders are in the pipeline. The PSU company, one of the largest aerospace and defence manufacturers in the world, designs and manufactures aircraft, helicopters, power plants, inertial navigation system and other key equipment.

MSCI’s rebalancing for February 2023 saw CG Power and Bank of Baroda getting, while pharma major Biocon was excluded from the index. The changes came into effect from March 1.Analysts say the inclusion of CG Power will lead to net inflows of $164 million, while Bank of Baroda will likely see inflows worth $136 million. On the other hand, Biocon, which has been excluded from the index, is set to witness outflows worth $65 million.

Apart from the inclusions and exclusions, five companies — Adani Enterprises, HCL Technologies, Jindal Steel & Power, Shriram Finance and ACC have seen weight reduction in the MSCI index. Five others, Reliance Industries, Infosys, HDFC, ICICI Bank and Tata Consultancy have seen weight additions.

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