Nifty 50 September rejig: Bharat Electronics, Trent likely to replace LTIMindtree, Divi’s Labs in 50-stock index

Defence PSU stock Bharat Electronics and Tata Group company Trent are expected to enter the NSE’s benchmark Nifty 50 index in its September reshuffle, according to the estimates by Nuvama Alternative & Quantitative Research. Contrary, LTIMindtree and Divi’s Laboratories are likely to be excluded from the Nifty 50 index.

These possible changes would lead to an inflow worth $500 million in Trent and $440 million in Bharat Electronics. Alongside, LTIMindtree and Divi’s Laboratories are estimated to witness an outflow to the tune of $210 million and $260 million, respectively.

However, the potential inclusion will be dependent upon the approval of futures and options (F&O) inclusion for Zomato and Jio Financial Services (JFS) by the Securities and Exchange Board of India (SEBI) before the announcement by NSE indices in August.

However, if the Securities and Exchange Board of India (SEBI) approves futures and options (F&O) inclusion for Zomato and Jio Financial Services before the rejig announcement by NSE Indices in August, these stocks will have a higher chance of making it to the Nifty Index.

“In that case, the inclusions will be Zomato, Jio Finance, and Trent, while the exclusions will be LTIMindtree, Divi’s Laboratories and BPCL, Nuvama said.

The average market-cap cut-off was until the end of July, with the official announcement occurring in the latter half of August and the adjustment taking place on September 30. The Nifty 50 index rebalancing takes place twice a year, based on six-month data ending January 31 and July 31.

F&O Inclusions

There are more than 70 stocks currently that qualify for F&O inclusions based on quantitative criteria but have not made the cut as SEBI is yet to approve them. Sebi has not approved any new inclusions since a couple of years, Nuvama noted.

However, the SEBI chief has recently highlighted that the regulator could soon introduce a couple of new stocks in the derivatives segment using revised methodology.

Bank Nifty Rejig

According to Nuvama’s estimates, Canara Bank may replace Bandhan Bank in the Nifty Bank index in the upcoming reshuffle. This anticipated change reflects adjustments based on market performance and index requirements.

Nifty Next 50 Index

The potential inclusions in the Nifty Next 50 include JSW Energy, NHPC, Union Bank of India, Hindustan Zinc and Indian Overseas Bank, while the Colgate Palmolive India, SRF, Marico, SBI Cards & Payment Services and Berger Paints are likely to be dropped out.

The inclusion of Divi’s Labs, LTIMindtree and BPCL in the Nifty Next 50 is subjective to the final decisions made during the Nifty 50 rejig.

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