Zomato, Trent, Jio Financial Services, BEL shares to join Nifty? What Nuvama says

Trent Ltd and Bharat Electronics (BEL) are likely to replace LTIMindtree and Divi’s Labs in the NSE benchmark Nifty 50 in the next index rejig. If Sebi approves F&O inclusion for Zomato Ltd and Jio Financial Services (JFS) before the rejig announcement by NSE indices in August, these stocks will have a higher chance of making it to the Nifty index, Nuvama Alternative & Quantitative Research said in its latest note.

In the base case, Trent could see $500 million in passive inflows while BEL could see $440 million inflows. Likely exiting members LTIMindtree and Divis Labs are seen experiencing passive outflows to the tune of $210 million and $260 million, respectively.

Nuvama said there are currently more than 70 stocks that qualify for F&O inclusions based on quantitative criteria but have not made the cut as Sebi is yet to approve them. "It has been a couple of years since Sebi approved any new inclusions, and it’s anyone's guess when it will happen next. A few weeks back, SEBI's chief highlighted in a media conversation that they could soon introduce a couple of new stocks in the derivatives segment using revised methodology," the domestic brokerage said.

In case Zomato and JFS see F&O inclusions, Trent, JFS and Trent may enter Nifty, while the exclusions will be LTIMindtree, Divis Labs, and BPCL.

For Nifty inclusion, the average market-cap cut-off will be considered until the end of July, with the official announcement occurring in the latter half of August (no firm date) and the adjustment taking place on September 30. 

In Nifty Bank, Nuvama expects Canara Bank to displace Bandhan Bank. In the Nifty Next 50, JSW, NHPC, Union Bank, Hindustan Zinc and Indian Overseas Bank could be likely inclusions. Exclusions may include Colgate-Palmolive, SRF, MRPL, SBI Card and Berger Paints. Inclusions of Divis Labs, LTIMindtree and BPCL in Nifty Next 50 would be subjective to Nifty rejig.