Nifty’s Index management Sub-committee (IMSC) has announced a rejig of certain NSE indices as part of its periodic review.
Nifty’s Index management Sub-committee (IMSC) has announced a rejig of certain NSE indices as part of its periodic review. The reshuffle that will come into effect on June 26 will not see any change in the Nifty 50 index but will see changes in the Nifty Next 50, Nifty 100, Nifty 500, and sectoral indices. The NSE announced that Nifty Next 50 will see Ashok Leyland Ltd., Indiabulls Housing Finance Ltd., L&T Finance Holdings Ltd, New India Assurance Company, and struggling telco Vodafone Idea exit from the index. These will be replaced by Abbott India Ltd, Indraprastha Gas Ltd, Muthoot Finance Ltd, and Torrent Pharmaceuticals Ltd.
A change in indices forces mutual funds and exchange trade funds to mirror the moves if they have their portfolios shaped up in a manner that reflects the index and its constituents. Along with Nifty Next 50, the Nifty 500 index will see 25 stocks being tucked out. Kishore Biyani led Future Lifestyle Fashions Ltd will also be excluded from the Nifty 500 along with Anil Ambani’s Reliance Capital, Reliance Power, and Reliance Infrastructure. Troubled non-banking finance company Dewan Housing finance has also been shown the door by the IMSC of NSE Indices Limited. Among the 25 stocks that will be replacing the excluded ones, IRCTC is one of the biggest names along with Garden Reach Shipbuilders & Engineers Ltd., GMM Pfaudler, Shipping Corporation of India, Sumitomo Chemical India, Tata Communications, and Ujjivan Small Finance Bank.
In the midcap space, Nifty Midcap 100 will see another Kishore Biyani firm, Future Consumer, exit the index along with Sterlite Technologies and Torrent Pharmaceuticals. Among sectoral indices, Nifty Auto will, from June 26, have Balkrishna Industries as the new entrant replacing Apollo Tyres. Nifty Financial services will see HDFC AMC and Piramal Enterprises enter taking the place of Edelweiss Financial Services and Indiabulls Housing Finance. Godrej Industries has also now been excluded from the FMCG index to be replaced by Varun Beverages.
A change in the Nifty 50 index is expected to happen in September. Nifty 50 has already seen the exit of troubled private sector lender Yes Bank and the inclusion of Shree Cements earlier this year. ICICI Direct in April said that top contenders to the Nifty 50 index include Radhakishan Damani’s Avenue Supermarts, API manufacturer Divi’s Laboratories, private insurer HDFC Life, FMCG player Dabur, and PSU stock SBI Life.