Apollo Hospitals may replace Indian Oil in Nifty 50 in next index rejig; PSU major may see $100 mln outflows

Apollo Hospitals is the most likely stock to be added to the NSE Nifty 50 index in the upcoming semi-annual index review, replacing PSU heavyweight Indian Oil Corp.

Nifty
Indian Oil is the stock that will most likely exit the benchmark Nifty 50.

Apollo Hospitals is the most likely stock to be added to the NSE Nifty 50 index in the upcoming semi-annual index review, replacing PSU heavyweight Indian Oil Corp, said Edelweiss Alternative Research. Nifty indices are rebalanced semi-annually, with the upcoming index review expected to be announced in the middle of February. Apollo Hospitals shares are currently part of the junior index Nifty Next 50. Earlier, analysts at Edelweiss had picked Apollo Hospitals and InfoEdge, while predicting either one of them to become a part of Nifty 50 in the next review.

“Despite the recent price correction in Apollo Hospital, we believe that it will dislodge Indian Oil from Nifty 50 Index,” Edelweiss said in a note. It added that Apollo Hospitals could see an inflow of around $175 million which is 1.7 ADV, whereas Indian Oil could see an outflow of about $100 million which is 5.5 ADV. So far this year Apollo Hospitals share price has taken a beating on Dalal Street, falling 8.5% to now trade at Rs 4,566 per share. In the previous year, shares of the healthcare company had rallied more than 107%.

Indian Oil is the stock that will most likely exit the benchmark Nifty 50. So far in 2022, the stock has rallied more than 8% and now trades at Rs 122.5 per share. In 2021, the stock had gained 21%.

Bank Nifty changes

Analysts have also picked out the most probable change that may occur on Bank Nifty — the entry of Bank of Baroda by replacing RBL Bank. “We continue to believe that Bank of Baroda will replace RBL Bank in the Nifty Bank Index. Bank of Baroda could see an inflow of $63 million which is 1.3 ADV, while RBL Bank could see an outflow of $28 million which is 1.2 ADV,” Edelweiss said in the note. 

Shares of Bank of Baroda are up 11.34% so far this year and now trade at Rs 93.35 per share, extending their 27% up-move charted in 2021. On the other hand, RBL Bank shares were up 12% so far this year. The up-move in RBL Bank shares comes after an abysmal 2021, where the scrip fell by more than 44%.

The next semi-annual rebalancing of Nifty indices is expected to be announced in the third week of February with a cut-off date of January 31 for most stocks. Adjustments to the indices are expected to be put in place till March 31 this year. 

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