There is no fundamental reason for the Morgan Stanley Capital International (MSCI) to reduce weightage on India, said Nilesh Shah, MD, Kotak Mahndra AMC.

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“We need protection against MSCI capping weightage of India,” Shah told CNBC-TV18.

On Wednesday, MSCI put India and Brazil on 'notice' for limiting investor access. The index warned that weights of India and Brazil could be capped on MSCI indexes if the countries continue to restrict use of local data in derivatives created by offshore exchanges.

MSCI said that India also has a lengthy and burdensome mandatory registration process for foreign investors.

A lot of FII money gets benchmark to MSCI indices and if India’s weightage comes down then it could have repercussions on what kind of flows we can get from FII, he said.“With respect to MSCI, we have to point out that there is no other country in the world including in their own universe where the largest bank, largest insurance company, largest FMCG company, largest auto company is owned in majority by foreigners,” Shah added.

On MSCI excluding HDFC Bank, Shah said, "We need to go out to all the people who can influence MSCI and at the same time engage with MSCI and ensure that they realizes irrationality,” he further said.

MSCI will consult its clients and announce the results by December 31.

First Published:May 31, 2018 9:02 AM IST