FTSE Index Rebalancing: A Look at Key Stocks Set for Growth
On September 20, the Financial Times Stock Exchange (FTSE) implemented significant changes to its indexes, resulting in 13 stocks being added, which are now poised to receive a substantial influx of investment. This adjustment is anticipated to trigger an investment surge totaling approximately $1 billion (around ₹8,400 crore), primarily driven by passive mutual funds that typically base their investments on these indices. Here, we delve into which stocks are included and the anticipated investment amounts.
Highlighted Stocks from the FTSE All World Index
Among the 13 stocks included in the FTSE All World Index are prominent companies such as KEI Industries, IRB Infrastructure Developers, and Cochin Shipyard. According to a report from brokerage firm IIFL Alternative Resources, the investment potential associated with these stocks is noteworthy:
| Stock Name | Expected Investment (₹ Crore) |
|---|---|
| KEI Industries | 443 |
| IRB Infrastructure Developers | 309 |
| Cochin Shipyard | 250 |
| HUDCO | 242 |
| Escorts Kubota | 225 |
| Hitachi Energy India | 217 |
| GE T&D | 184 |
| Motilal Oswal | 167 |
| Bharat Dynamics | 159 |
| Lloyds Metals & Energy | 150 |
| Endurance Technology | 142 |
| Bank of Maharashtra | 100 |
| Central Bank of India | 58 |
Additional Weightage Changes: Opportunities for Selected Stocks
In addition to the newly added stocks, several companies already present in the index saw an increase in their weightage, including ICICI Bank, Kotak Mahindra Bank, Aditya Birla Capital, and Tata Technologies. This adjustment is projected to enable an extra influx of around ₹3,200 crore across these stocks:
| Stock Name | Expected Additional Investment (₹ Crore) |
|---|---|
| ICICI Bank | 1,972 |
| Kotak Mahindra Bank | 878 |
| Tata Technologies | 242 |
Impact on Mahindra & Mahindra
On the flip side, Mahindra & Mahindra might face challenges as its weightage in the index has been reduced. Consequently, passive mutual funds are likely to sell shares amounting to approximately ₹543 crore, leading to potential downward pressure on the stock price.
Conclusion
The rebalancing of the FTSE index presents a significant opportunity for investors as 13 stocks are set to benefit from substantial inflows. Conversely, the shift in weightage may adversely affect certain companies. Keeping a close watch on these developments can help investors capitalize on potential market movements.
Disclaimer: The insights and investment advice provided here are for informational purposes only and do not reflect the views of the management of this platform. Users are encouraged to seek advice from certified financial experts before making investment decisions.
