JM Financial expects Trent, BEL to enter Nifty50; decodes Zomato's 'addition' in the index

Domestic brokerage firm JM Financial expects two stocks to be included in the Nifty50 index, with the exclusion of two other counters in the coming weeks. NSE indices rebalancing announcement is scheduled in the month of August, and the rejig shall be effective from September 30, 2024.

JM Financial is expecting Trent Ltd and Bharat Electronics Ltd (BEL) to become a part of Nifty50 index in the upcoming rebalancing exercise. Both the counters may see an expected inflow of $412 million and $392 million, respectively, if they become Nifty50 constituents.

However, they are reported to replace LTIMindTree Ltd and Divis Laboratories Ltd (Divis Labs) in the next rejig. Both the companies are likely to replace an outflow of $180 million and $224 million, respectively, as per the note from JM Financial. The index provider shall assume an average free-float market capitalization between February 1 and July 31 for the September rebalancing.

The brokerage has also noted that Jio Financial Services Ltd (Jio Fin) and Zomato Ltd have an average free-float higher than Trent and BEL. However, their absence from the F&O segment will not allow their inclusion in the Nifty50 index as cash market counters cannot become index constituents.

Any inclusion of them in the F&O segment would lead to their inclusion in the Nifty50 index, said JM Financial. Under such a scenario, Jio Financial, Zomato and Trent will be the inclusions in the Nifty50 index, while LTIMindtree, Divis Labs and Eicher Motors shall be the exclusion from the index.

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