InvestorQ : What happened to the MSCI upgrade of India in the MSCI index? It was supposed to bring in more FPI investments into India.
Dhwani Mehta made post

What happened to the MSCI upgrade of India in the MSCI index? It was supposed to bring in more FPI investments into India.

Answer
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Khushi Patel answered.
5 months ago


That upgrade has been deferred by the MSCI for now. In fact, one point that is now being debated is whether deferment of an India weightage upgrade by the MSCI was the reason for the sharp fall in Indian markets. The MSCI had actually decided to hike India’s weightage in the benchmark index by 100 bps which would have resulted in an inflow of $12-15 billion into India. However, the upgrade got deferred resulting in a bout of selling from ETFs and index funds. Many large institutions and proprietary traders had taken large positions in front line stocks in anticipation of the upgrade. Their sharp unwinding was also responsible for the sharp fall, which shows why some quality frontline stocks also suffered. But, that may not be the entire reason for the fall. Correction was a global phenomenon and hence the contagion sell-off would have still remained a major issue for Indian markets.