Retail chain D-Mart operator Avenue Supermarts, and online classified company Info Edge are expected to be added to the Nifty50 in the upcoming semi-annual review, said Edelweiss Alternative Research.
The brokerage firm said as per understanding of the methodology and calculations, there are no confirm Nifty inclusion or exclusion names for the September 2021 Semi Annual Review.
In case of Avenue Supermarts, the brokerage feels the stock meets most of the criteria for inclusion but is falling short of being part of derivatives. In case stock gets introduced in derivatives before the NSE announcement of Index Rebalance, which normally happens at the end of August, there is high probability of inclusion in the Nifty Index, said Edelweiss.
The announcement of rejig in Nifty50 is expected by the end of August 2021 and the rebalancing date could be September 29.
Info Edge, which owns Naukri.com, meets most of the criteria for inclusion but is falling marginally short of requirement of 1.5 times the average free float market cap of the smallest constituent in the Nifty50 Index, said Edelweiss.
The counter's average free float market cap as on June 17 is 1.45x of Indian Oil Corporation. The trading days till July 30 will be crucial to move the needle, the brokerage added.
Edelweiss feels Info Edge will see weight of 55bps resulting in flow of $110 million and D-Mart will see weight of approximately 72bps resulting in flow of $140 million, if they included in the Nifty50.
Indian Oil Corporation is likely to be excluded if any one of the stocks get included in the Nifty50, resulting in a weight reduction of 43bps and an outflow of $82 million, said the brokerage.
Moreover, in case of Nifty Bank index, the brokerage feels there are no stocks which qualify to replace any of the existing constituents.
"Only Yes Bank meets most of the criteria, but it is a non-F&O constituent and with current set of data), the stock does not qualify to get introduced in derivatives," said Edelweiss.