Synopsis:
InterGlobe Aviation and Max Healthcare will join the Nifty 50, replacing Hero MotoCorp and IndusInd Bank, while four new companies are added to the Nifty Next 50.
The Nifty indices are extremely important in the Indian stock market. Many large investors, mutual funds, and ETFs track these indices, so any addition or removal of a stock causes significant market movements. The changes in the Nifty 50 and Nifty Next 50 indicate which companies are gaining strength and which are losing ground.
What is Nifty Rejig?
A Nifty rejig is simply the reordering of stocks in the Nifty 50 index. The NSE reviews the list of top 50 companies twice a year (March and September) and determines which stocks to add or remove.
The NSE decides which stocks are included in the Nifty 50 index by considering their average free-float market capitalisation over a six-month period. Free-float market capitalisation represents the total market value of shares available for public trading, excluding promoter holdings and other locked-in shares.
Nifty 50 Changes & Flow of Investments
InterGlobe Aviation and Max Healthcare Institute will be added to the Nifty 50 index, replacing Hero MotoCorp and IndusInd Bank. These changes will take effect from September 30.
Brokerages estimate that healthcare provider Max Healthcare may attract inflows of around $400 million, and InterGlobe Aviation, the parent company of IndiGo, could see inflows of around $600 million.
The additions are expected to replace IndusInd Bank and Hero MotoCorp, with the lender likely facing outflows of $230 million and the two-wheeler company seeing outflows of nearly $600 million.
Nifty Next Rejig & New Entrants
The Nifty Next 50 index is just below the Nifty 50 and is often referred to as a stepping stone to the Nifty. It highlights upcoming companies that may join the Nifty 50 in the future while removing those that no longer qualify.
Hindustan Zinc, Mazagon Dock Shipbuilders, Siemens Energy India, and Solar Industries India will be included in the Nifty Next 50 index. They will replace Dabur India, ICICI Prudential Life Insurance Company, InterGlobe Aviation, and Swiggy, effective September 30.
Written By Akshay Sanghavi
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