Nykaa and Coromandel International to Join MSCI India Index in May 2025 Review: A Major Boost for Indian Equities

What Is the MSCI India Index?

The MSCI India Index is a key benchmark used by international investors to assess the performance of Indian equity markets. It includes large and mid-cap segments and is widely tracked by index funds and exchange-traded funds (ETFs). When a company is added to this index, it often experiences a surge in demand as global investors rebalance their portfolios to reflect the new composition.

Why the Inclusion Matters

Being included in the MSCI index is not just a matter of prestige—it has real financial implications. Passive funds that track MSCI indices are obligated to buy stocks that are part of the index. For Nykaa and Coromandel International, this translates into millions of dollars in potential investments.

Analysts estimate:

Coromandel International could see inflows between $227 million and $252 million.

Nykaa is expected to attract inflows between $181 million and $199 million.

These inflows are likely to boost liquidity, increase shareholding from global investors, and improve overall market perception.

Market Response: Investor Sentiment Positive

Following the announcement, Nykaa’s stock surged by over 3%, reaching ₹203.8 on the Bombay Stock Exchange. The rise reflects investor optimism about the company’s future as it gains international visibility.

On the other hand, Coromandel International saw mixed reactions. The stock initially rose by 1.82% but experienced some profit-booking, closing the session nearly 4% lower. Despite the short-term volatility, analysts believe the long-term outlook remains strong, especially with the expected institutional interest.

Broader MSCI Index Changes

Alongside these additions to the MSCI Global Standard Index, several other changes were announced:

Coromandel International and GMR Airports Infrastructure Ltd. will be added to the MSCI India Domestic Index.

Sona BLW Precision Forgings Ltd. will be removed from the same index.

Further, the MSCI India Domestic Smallcap Index will see:

12 new inclusions: including Tata Technologies, Hexaware Technologies, and Godrej Agrovet.

21 removals: such as Godrej Industries, TeamLease Services, and Aarti Drugs.

These adjustments are based on criteria like free-float market capitalization, trading liquidity, and sector representation.

The Bigger Picture

The inclusion of Nykaa, a digital-first beauty and fashion retailer, signals the growing relevance of new-age tech and consumer startups in India’s economic landscape. Nykaa, launched in 2012, has quickly grown into one of India’s most recognized D2C (direct-to-consumer) brands and is seen as a representative of India’s digital transformation.

Coromandel International, part of the Murugappa Group, is one of India’s leading agri-input companies, dealing in fertilizers, crop protection, and specialty nutrients. Its inclusion highlights the global interest in India’s growing agri-tech and rural-focused sectors.

What Investors Should Know

Inclusion in the MSCI index often leads to:

Increased foreign investment

Higher trading volumes

Improved brand credibility

Price volatility in the short term

Investors are advised to monitor these stocks closely over the next few weeks, especially around the implementation date, as fund activity may significantly influence prices.

Conclusion

The addition of Nykaa and Coromandel International to the MSCI India Index is a positive indicator of India’s evolving market narrative. It reflects the confidence of global investors in both digital innovation and core industries like agriculture. As the Indian stock market continues to expand and diversify, such inclusions are expected to become more frequent, bringing with them broader investor participation and deeper market maturity.

Stay tuned for further updates on market trends, quarterly results, and index movements.