Shares of pharma major Divi's Laboratories and IT giant LTIMindtree jumped over one percent each on August 26 despite being excluded from the Nifty 50 from September 30.
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. Bharat Electronics and Trent will replace the two existing counters in the Nifty 50. The replacement will also be applicable across the Nifty 50 Equal Weight index.
At 9.23 am, LTIMindtree stock was 1.5 percent higher on the NSE, at Rs 5,724.3 per share, while Divi's Laboratories shares jumped one percent to Rs 4,902.2 apiece.
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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. These changes will become effective from September 30.
Only stocks that are available for trading in NSE’s Futures & Options segment are eligible for inclusion in the Nifty 50 index.
Also Read | Bharat Electronics, Trent to replace Divis Labs, LTIMindtree in Nifty 50 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.
Based on JM Financial's analysis, the inclusion of Trent and BEL in the key index might bring in combined inflows of $917 million, while the exclusion of IT player LTIMindtree and pharma major Divi's Labs will lead to combined outflows of $426 million, based on passive funds that track Nifty 50.
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