SUMMARY
- In the May review, the MSCI India Index had 13 additions and 3 exclusions. Paytm was one of the deletions, and PB Fintech was added to the index.
- Paytm stated that the reclassification reflects the changes in the market capitalization of the company. Paytm has now been included in the MSCI India Domestic Small Cap Index.
- Since the end of January, Paytm’s market capitalization has more than halved to $2.6 billion due to the RBI’s crackdown on Paytm Payments Bank.
One 97 Communications, the parent company of fintech giant Paytm, has been taken off of the MSCI India Index due to a precipitous decline in its market capitalization.
In the May review, the MSCI India Index saw 13 additions and 3 exclusions. Paytm was one of the deletions, and PB Fintech was added.
In addition to Paytm, the list has been updated to include Canara Bank, Indus Towers, Jindal Stainless JSW Energy, and Mankind Pharma. Berger Paints India and Indraprastha Gas have been deleted.
It is important to note that One 97 Communications’ shares have been heavily pressured to sell after the Reserve Bank of India (RBI) imposed regulatory restrictions on some of the bank’s banking operations.
Recent changes at the top of Paytm’s management have made matters worse. The market capitalization of Paytm has dropped to $2.6 billion, more than half of what it was at the end of January.
On the other side, PB Fintech, the parent company of significant insurtech Policybazaar, has been rising, supported by the company’s continuously strengthening business fundamentals.
In 2024, the market value of the company has risen by 60% thus far. As of right now, PB Fintech is valued at $6.8 billion.
Now its included in the MSCI India Domestic Small Cap Index, however it was previously excluded from the MSCI India Index.
The fintech company claimed in a statement that its inclusion in the MSCI Small Cap Index “reflects confidence” in the wake of the addition.
“OCL stock has been reclassified from MSCI India Index (Large and Mid Cap companies) to MSCI small-cap. The move is part of the routine index review conducted by MSCI, a process that periodically adjusts the composition of its indices to match the evolving market conditions and sizes of listed companies,” the statement said.
“The reclassification reflects changes in market capitalisation, aligning it with other entities in the small-cap segment as defined by MSCI,” it added.
The MSCI Index states that all of the new modifications will go into effect at the end of May 31, 2024.
Paytm’s stock on the BSE closed Wednesday’s trading session 1.05% higher at INR 343.25, while PB Fintech’s share price increased 3.61% to INR 1,273.35.