Nuvama Alternative & Quantitative Research on Tuesday said LTIMindtree, the merged entity of L&T Infotech & Mindtree, is unlikely to replace BPCL in Nifty's next rejig slated in March next year. It sees Adani Power, Varun Beverages, ABB, Page Industries among stocks that may enter Nifty Next 50. Nuvama also sees border line chances of one of the three stocks -- Adani Wilmar or Trent and TVS Motor -- entering the next 50 index.
On LTIMindtree inclusion, Nuvama said: "This is the most asked questioned, and as per our best understanding of the existing methodology we do not expect LTI Mindtree (LTIM) to make it to the Nifty in the March 2023 review," Nuvama said.
Nuvama said it was is quite early to pinpoint a stock that holds the strongest chance to replace HDFC on its merger ex-date. For now, it expects the merger’s completion by Q1FY24 and a few stocks currently on Nuvama's radar are Pidilite, LTI Mindtree, Ambuja Cement and Tata Power.
Nuvama noted that the most important criteria for a Nifty inclusion is that the stock should compulsorily be part of the derivatives segment.
For instance, average free float market caps of Avenue Supermarts, Adani Green Energy and Adani Transmission are significantly higher than most of the existing Nifty 50 constituents, but the stocks have not been included in the index for the past few reviews as they are not a part of the F&O segment.
"If any of the above stock gets included in derivatives by the announcement date, then it would make it to Nifty 50," it said.
Biocon, Gland Pharma, Mphasis and Bandhan Bank are seen as likely exclusions from the Nifty Next 50 pack.
Nuvama noted that Adani Power was excluded from all the Nifty Indices in the September rejig on account of proposed voluntary delisting. On September, 17, Adani Power intimated stock exchanges on withdrawing of the proposal to voluntarily delist.
"Thus, we expect the stock to make a comeback to Nifty Indices," it said.
The index provider will officially announce the list in the second half of February 2023. The m-cap cut-off date would be January 31 and the effective date of the rejig would be March 31.
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