​Bharat Electronics, Trent stocks gain on Nifty 50 entry; Index adjustment effective Sept 30

Nuvama predicted that in case Trent and BEL are included in the Nifty 50 index, it would result in both these stocks getting inflows worth up to $647 million and $463 million, respectively.

Shares of Bharat Electronics and Trent edged higher as they are included in the benchmark Nifty 50 index. The Index Maintenance Sub-Committee (Equity) of NSE Indices has decided to make changes in various Nifty equity indices as a part of the semi-annual review of broad market indices.

Trent, with an average free-float market capitalization of Rs 99,364 crore, and Bharat Electronics (BEL), with an average free-float market capitalization of Rs 89,317 crore, have been added to the Nifty 50 index. These changes will become effective from September 30.

The inclusion is because the six-month average free-float market capitalisation of these companies within the eligible universe is at least 1.5 times the six-month average free-float market capitalisation of the smallest constituents, which were Divis and LTIMindtree, said NSE in a circular.

Brokerage firm Nuvama Institutional Equities in an Alternative & Quantitative Research note earlier predicted that in case Trent and BEL are included in the Nifty 50 index, it would result in both these stocks getting inflows worth up to $647 million and $463 million, respectively.

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BEL, the Navratna defence and aerospace PSU has also delivered handsome returns to shareholders. The stock has risen 126 percent over the past 12 months, more than doubling investors' money. So far this year, the stock has rallied 65 percent, beating Nifty and Nifty Next 50's returns of 14 percent and 39 percent respectively.

Trent shares ended half a percent lower at Rs 6,950 on the National Stock Exchange (NSE) in the previous session. The stock hit a low of Rs 365 on March 24, 2020, amid lockdown due to Covid-19.

Since then, the Tata Group stock has surged around 20x. In the last one year, the stock has zoomed 246 percent, far outpacing the Nifty 50 and Nifty Next 50 which rallied 28 percent and 68 percent, respectively during this period.

Stocks that are available for trading in NSE’s Futures & Options (F&O) segment are only eligible for inclusion in the Nifty 50 index. The replacement in Nifty 50 will also apply to the Nifty 50 Equal Weight Index.

Both BEL and Trent have been removed from the Nifty Next 50 index due to inclusion in the Nifty 50 index.

Bharat Heavy Electricals (BHEL), Divis Laboratories, JSW Energy, LTIMindtree, Macrotech Developers, NHPC, and Union Bank of India will replace Berger Paints, BEL, Colgate Palmolive (India), Marico, SBI Cards, SRF, and Trent in the Next 50 index.