Key Changes in the Nifty 50 Index
A recent National Stock Exchange (NSE) announcement indicates that a notable upgrade would include Tata Group’s Trent Ltd. . and state-run Bharat Electronics Ltd. (BEL) in the Nifty 50 index. These two stocks will replace the technological services business LTIMindtree of Pharmaceutics Divi’s Laboratories as part of the semi-annual rejig for the exchange The new arrangement will take shape on September 30, 2024.
Divi’s Laboratories, which joined the Nifty 50 in 2020, and LTIMindtree, a more recent newcomer in 2023, will depart the index. Including Trent and BEL, broking business Nuvama Alternative & Quantitative Research projects up to $500 million for Trent and $450 million for BEL, likely producing large inflows into both companies.
Trent’s stock has been soaring amazingly. From a low of ₹365 on March 24, 2020, matching the start of the nationwide COVID-19 lockdown, Tata Group stock has risen over 20 times over the last four and a-half years. Bel, a Navratna PSU, has also generated exceptional gains as its stock price increased by 65% in 2024 alone and 130% over the last 12 months.
“Trent and BEL have been included in the Nifty 50 index as the six-month average free-float market capitalisation of these companies within the eligible universe is at least 1.5 times the six-month average free-float market capitalisation of Divi’s and LTIMindtree,” the NSE Circular said.
Two other probable candidates for the Nifty 50 index, Hindustan Aeronautics and Tata Power, were omitted as their average free-float market capitalisation was less than 1.5 times that of the lowest index components.
Changes in Next 50 and Nifty Bank
Trent and BEL will ascend to the Nifty 50 index, while Divi’s Laboratories and LTIMindtree will migrate. Among the stocks included in the Nifty Junior index are BHEL, JSW Energy, Macrotech, NHPC, and Union Bank of India. In the meantime, the Nifty Junior index will exclude SRF, Colgate-Palmolive, Marico, SBI cards, and Berger Paints.
In yet another expected move, Canara Bank will replace Bandhan Bank from the Nifty Bank index. Among PSU stocks, IRFC will be included into the Nifty PSE index; LIC would be excluded.
These trends demonstrate the dynamic nature of India’s stock market indexes because they show variations in market capitalisation and stock performance across different sectors. Investors and market participants will be closely watching how these events impact specific stocks as well as the market overall.
