FTSE Shake-Up: Vishal Mega Mart, Swiggy & Others Set to See $313M in Passive Fund Inflows

Big news for Indian markets: the latest reshuffle in the FTSE Russell global indices is set to push around $313 million into select stocks. Among the top names getting a boost? Vishal Mega Mart, Hyundai Motor India, and Swiggy. These changes, effective as of June 20, signal India’s growing role in global passive investing.

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Who's Benefiting and Why It Matters

According to estimates from Nuvama Alternative & Quantitative Research, index-tracking ETFs and funds will now need to realign their holdings, resulting in significant buying activity for newly added stocks.

Vishal Mega Mart is leading the pack with a projected $115 million inflow, thanks to its addition to the FTSE Global Mid-Cap Index. This move follows the company's decision to increase its public shareholding by selling a 20% stake in the promoter. The result? Not just FTSE inclusion, but a possible entry into the MSCI Index this August, potentially bringing in another $225 million in foreign capital.

Joining the FTSE large-cap list are Hyundai Motor India, Swiggy, Waaree Energies, and NTPC Green Energy, all of whom went public in late 2024. Each of these companies is expected to attract passive investments ranging from $22 million to $56 million.

Smaller names aren’t being left out, either. Companies like OneSource Speciality Pharma, Afcons Infrastructure, Sai Life Sciences, and Inventurus Knowledge Solutions are making their way into the small- and micro-cap indices. Their expected inflows, between $7 million and $15 million, may be smaller, but they reflect India’s growing presence on global investing radars.

What This Means for Markets

These changes aren’t just symbolic. Passive funds are required to replicate index changes, which usually triggers a spike in trading volumes and often in stock prices, too. Historically, companies listed in major indices have enjoyed more attention from both institutional and retail investors.

That pattern held this week: the Sensex and Nifty 50 each jumped about 0.8% on Thursday, helped along by gains across all 13 sectoral indices. Even the India VIX, which tracks market volatility, fell nearly 6%, a sign that investor confidence is on the rise, especially with the new government settling in.

Spotlight: Vishal Mega Mart & Co.

Vishal Mega Mart’s inclusion is a significant endorsement of its scale, governance improvements, and public share availability. If it does land that MSCI spot in August, expect another surge in investor interest.

Hyundai Motor India, Swiggy, and Waaree Energies are also grabbing global attention by joining the large-cap club. Their inclusion speaks to their rising market caps, and in Swiggy’s case, marks a significant milestone in its journey from startup to stock market heavyweight.

Who’s Losing Ground?

Of course, every reshuffle has its downsides. ITC Hotels, recently spun off from ITC Ltd, is being moved from the large-cap to the mid-cap index. It’s not a removal, just a size reclassification, but it's still noteworthy.

Some prominent companies, including Titan, Adani Enterprises, JSW Steel, Asian Paints, and Shree Cement, are facing reduced index weightings. This is likely to result in passive outflows of $21 million to $30 million each. That might cause short-term pressure, but strong companies typically recover quickly once the dust settles.

What’s Next: Eyes on August MSCI Review

Looking ahead, investors should watch for the August MSCI index review, which could be a significant development. Foreign investors are showing renewed interest in India, especially as uncertainty looms in other global markets.

Vishal Mega Mart is particularly well-positioned here, and if included, it could attract an additional $225 million in global capital. That’s a significant increase, not just in valuation but also in its standing with international investors.

Final Take: India’s Rising Global Footprint

This June’s FTSE reshuffle isn’t just routine; it’s part of a larger trend of India gaining weight in global portfolios. The $313 million in passive flows is a signal that the world is taking India’s growth story seriously.

For investors, this reshuffle offers key insights into where the smart money is headed. For Indian companies cutting, it marks a significant step onto the global stage.