The National Stock Exchange’s (NSE) semi-annual rejig for the broad-based indices will be adjusted after review on September 29, after market close, and will come into effect from September 30. The cut-off dates for the semi-annual rejig are January 31 and July 31 each year.
As per a report by Nuvama, InterGlobe Aviation (IndiGo) and Max Healthcare Institute will be added to the Nifty 50. These two stocks will be replacing Hero MotoCorp and IndusInd Bank.
InterGlobe Aviation is expected to see inflows of $537 million, and Max Healthcare $412 million. Meanwhile, Hero MotoCorp may face outflows of $294 million and IndusInd Bank $227 million.
The index revision received approval from the Index Maintenance Sub-Committee (Equity) of NSE Indices Ltd.
This regular assessment aims to ensure that the index reflects current market trends and sector representation. By doing so, it seeks to remain in sync with the shifting dynamics of the Indian economy and stock market.
InterGlobe Aviation has an average free-float market capitalisation of Rs 1.14 lakh crore, while Max Healthcare Institute has an average free-float market capitalisation of Rs 84,555 crore.
On the other hand, Hero MotoCorp’s average free-float market capitalisation stood at Rs 52,336 crore, and that of IndusInd Bank stood at Rs 55,270 crore.
Criteria for selection
According to NSE Indices, the key criterion is the market impact cost, which refllect’s stock’s liquidity. For a stock to qualify for possible inclusion into the Nifty 50, it must have traded at an average impact cost of 0.50% or less for 90% of trades over the past six months, based on a basket size of Rs 10 crore.
Secondly, the companies that trade in the F&O segment are only eligible to be constituents of the index.
Stocks making cut for Nifty Next 50
The stocks that are eligible but not included are Solar Industries, Siemens Energy, Mazagon Dock Shipbuilders, and Hindustan Zinc.