Another Adani Group firm could enter the NSE Nifty 50 index in the upcoming Semi-annual Index review, according to Abhilash Pagaria, Head – Edelweiss Alternative & Quantitative Research. With the cut-off date of July 29 behind, analysts at Edelweiss Alternative & Quantitative Research believe that Adani Enterprises is best placed to enter the headline index and could replace Shree Cements in the 50-stock pack. NSE indices are rebalanced twice every year and changes are made to the index constituents based on various factors. Edelweiss also anticipates a host of other changes to various indices managed by NSE.
With the inclusion of Adani Enterprises in the NSE Nifty 50 index, analysts believe funds worth $213 million could head towards the stock. This is upward of the $183 million inflows that were predicted earlier in May by Edelweiss. Shree Cements’ exclusion could result in $87 million in outflows from the stock. In the last 6 months, Adani Enterprises’ share price is up 51.77% to now trade at Rs 2689 per share. On the other hand, Shree Cements stock is down 16.49% and is trading at a price of Rs 21096 per share. Analysts at Edelweiss believe this trend in the stocks could continue till the rebalancing date.
Changes to the NSE indices are expected to be announced in the second half of this month and rebalancing is scheduled to take place on September 30.
Nifty Next 50 index could see the entry of marquee names such as Adani Wilmar, Samvardhana Motherson International, IRCTC, Bharat Electronics, and Hindustan Aeronautics. Edelweiss in May had predicted that Life Insurance Corporation of India (LIC) and Tata Power could also enter the index but that is no longer seen to be the case. Additionally, Shree Cements would also enter the Nifty Next 50 index. Moving out of the junior Nifty will be Lupin, Jubilant FoodWorks, Zydus Lifesciences, Punjab National Bank, and SAIL along with Adani Enterprises.
For the Nifty IT index, Edelweiss believes that Persistent Systems’ stock may enter the index replacing L&T Technology Services. Inflows towards Persistent Systems are seen to be in the range of $18 million and outflows from L&T Tech may be around $12 million too. No changes to the Nifty Bank index have been predicted.
Radhakishan Damani’s Avenue Supermarts (DMart) is likely to again miss out on the possibility of entering the Nifty 50 as the stock is not part of the Futures & Options segment — a key criterion for addition to the benchmark.