The Nifty 50 index is reviewed twice a year, based on six-month data ending January 31 and July 31. The index represents 50 stocks based on free-float market capitalization and liquidity, with an average impact cost of 0.50% or less for 90% of the observations for a basket size of Rs 10 crore. The next index reshuffle will be effective from September 30.
The report mentioned that for September rebalancing, based on average free float market cap that prevailed between February 1 to July 31, the above-mentioned changes are expected.
In August so far, the share price of Trent has surged by 17.1% whereas for Bharat Electronics went down by 3.6%. For LTIM and DIVI, the share price went up by 1.6% and down by 0.8% respectively in the said period.
After the index reshuffling, Trent and Bharat Electronics are expected to receive flows of 523 $ million and 394 $ million respectively. On the other hand, LTI Mindtree and Divis Laboratories are expected to witness outflows of 205 $ million and 221 $ million respectively.The report also mentioned that Jio Financial and Zomato have an average free float market cap higher than Trent and Bharat Electronics but they are not likely to be included in Nifty as they are not a part of the F&O segment.JM Financial report also predicts that if any announcement related to Jio Financial and Zomato to be included in the F&O segment comes then they might get included in the Nifty. In such a scenario, Jio Financial Services, Zomato, and Trent will be included in the index and LTI Mindtree, Divis Laboratories, and BPCL might be excluded. In the Bank Nifty Index, Canara Bank might get included whereas Bandhan Bank might be excluded. The share price of Canara Bank and Bandhan Bank went down by 2.4% and 4.2% respectively in August so far. Canara Bank is expected to receive flows of 84 $ million whereas Bandhan Bank might witness an outflow of 47 $ million.
No changes in Technology/IT index are expected, according to the report.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.