Zomato and IRCTC are among the six stocks that are likely to be included in the Nifty Next 50 index in the upcoming rebalancing of NSE indices.
Zomato and IRCTC are among the six stocks that are likely to be included in the Nifty Next 50 index in the upcoming rebalancing of NSE indices, IIFL Securities said in a note. The brokerage firm said that the Nifty Next 50 rebalancing will see six inclusions while benchmark NSE Nifty 50 will see the inclusion of one scrip — Apollo Hospitals. NSE’s semi-annual index review will be announced later this month and the changes to various NSE indices will come into effect from March 31. NSE indices are rebalanced according to NSE’s own methodology twice every year.
Nifty Next 50 inclusions
Zomato – New-age internet company Zomato is expected to make the cut and enter Nifty Next 50 in the upcoming rejig. Zomato shares are down 30% year to date to trade at Rs 98.9 per share, but the stock is still trading above the IPO price.
IRCTC – PSU stock IRCTC is another possible entrant to the index. The scrip has gained nearly 2% this year and closed today’s session at Rs 860 apiece.
Mindtree – IT stock Mindtree has faced the brunt along with other technology stocks this year and is down 15% year to date at Rs 4,066 per share.
Indian Oil Corporation – Indian Oil, the PSU stock has zoomed close to 10% this year. IIFL believes the stock could enter Nifty Next 50 upon exclusion from the Nifty 50. IOC’s stock closed Wednesday’s trade at Rs 124 per share.
SRF – The stock is up 1.7% this year at Rs 2,453 apiece.
Tata Power – The Tata Group company has seen a strong start to 2022, zooming more than 12% so far to sit at Rs 250 per share.
Nifty Next 50 exclusions
Yes Bank – Troubled private sector lender Yes Bank is among the stocks that may exit the Nifty Next 50 this month. The stock is down 3.5% this year sitting at Rs 13 per share.
IGL – Indraprastha Gas Limited’s (IGL) share price is trading at Rs 407 per share, down 15% so far this year.
Jindal Steel: The stock is up more than 7% this year at Rs 417 per share. Jindal Steel shares are expected to exit the index.
Aurobindo Pharmaceuticals: The pharma stock has performed well in recent days but is still 8% down year-to-date at Rs 673 apiece.
HPCL: State-owned HPCL is also expected to be shown the door in the next rebalancing of the NSE indices. The stock is down 2% in 2022 to trade at Rs 290 per share.
Apollo Hospitals: The stock is expected to enter the benchmark Nifty 50 and hence move out of the Nifty Next 50 index. Apollo Hospitals closed at Rs 4,667 per share.
Change in Nifty fundamentals
It is widely believed that Nifty 50 will see the entry of Apollo Hospitals and the exit of Indian Oil. The move is expected to impact the fundamentals of Nifty 50. “‘Look through earnings’ of the NIFTY50 index will drop as IOCL’s expected free float earnings for FY22 stands at Rs 51 bn or 8x of Apollo Hospitals FF earnings,” said ICICI Securities in a recent note. The brokerage firm added that FY23 P/E of the Nifty 50 index will increase by 1.3% with the inclusion of Apollo Hospitals.
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