Asia's oldest bourse BSE Ltd and Indigo-parent InterGlobe Aviation may be included in the benchmark Nifty 50 index during the next review, said sources to CNBC-TV18. On the flip side, beleaguered lender IndusInd Bank and auto player Hero MotoCorp might be deleted from the index.
BSE is likely to be eligible for inclusion in the induces despite only being listed on the NSE, as it meets the required listing and trading criteria. The upcoming Nifty 50 index review is expected to be conducted in August, and the changes will be effective from September.
At 12.50 p.m., shares of BSE rallied over two percent to Rs 2,745 apiece. InterGlobe Aviation's stock price gained 0.75 percent to Rs 5,431 per share. IndusInd Bank's stock was lower by 0.4 percent, quoting Rs 837, while Hero MotoCorp's share price was down 2 percent at Rs 4,256.
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BSE shares have risen nearly 120 percent from their March lows, driven by increased activity in the equity derivatives segment and market buzz around the upcoming IPO of larger peer NSE. Recently, the index provider's stock was put under the Additional Surveillance Measure (ASM) framework, triggered by unusual price movement, high volumes, and concentrated client activity.
InterGlobe Aviation's shares have been on a steady rally, rising 22 percent over the past six months, driven by increasing customer traffic. Jefferies has said the IndiGo parent is a 'unique, strong' franchise, with a dominant market share of over 60 percent in domestic air travel.
On the flip side, IndusInd Bank shares have tumbled 11 percent over the past six months, as fraud and regulatory concerns pressured the stock. Recently, the banking stock was excluded from the 30-share Sensex as well. IndusInd Bank has had a rough few months due to governance issues and accounting-related concerns, along with derivatives portfolio discrepancies.
Over the past six months, Hero MotoCorp's stock has had a lackluster performance on the bourses, as tepid demand and elevated financing costs continued to dampen consumer sentiment.
How are stocks chosen to join the Nifty 50?
The Nifty 50 index is reshuffled twice every year, based on six-month data ending January 31 and July 31. The changes to the index are then made in March and September. To decide the stocks that enter the Nifty 50 index, NSE looks at the average free-float market capitalisation for the six months.
Free-float market cap refers to the market value of shares readily available for trading by the public, excluding promoters' holdings and other restricted shares.
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