Jio Financial shares to get excluded from Sensex today? What Nuvama says

Jio Financial Services (JFS), the demerged financial services business of Reliance Industries, may exit Sensex today. As per Nuvama Alternative & Quantitative Research, the stock's exclusion from Sensex is all likely, unless the stock triggers a lower circuit limit. An upper circuit limit may not be a concern, the brokerage added.

Nuvama Alternative & Quantitative Research noted that JFS accounts for 1.1 per cent weight in Sensex, which means passive selling may involve around 60 million shares, equivalent to roughly $180 million. Should the exclusion be deferred, the exchange will announce during market hours, the brokerage noted.

According to Nuvama Alternative & Quantitative Research's methodology understanding, Jio Financial would not be deleted until two consecutive days of the spun-off entity avoiding the price band (upper or lower).

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For instance: No price band hit (upper or lower) on August 31 (Thursday) and September 01 (Friday) leads to exclusion on September 04 (Monday). The stock will come out of  Trade to Trade (T to T Segment) from September 4, likely smoothing the exclusion next week.

Based on its methodology understanding, Nuvama said Nifty Indices will issue a press statement announcing the exclusion of the spun-off entity only after two consecutive days of it not hitting the price band. During this period, there will be no communication from their end.

On the other hand, MSCI and FTSE indices would maintain Jio Financial in the index, with no inflow or outflow impact.

Jio Financial hit a 5 per cent upper circuit limit at Rs 231.25 on BSE. The scrip commanded a market capitalisation of Rs 1.47 lakh crore against Rs 1.68 lakh crore on the day of its listing.

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