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New criteria may trigger Nifty churn

The move could see passive funds chasing the new entrants

BS Reporter  |  Mumbai 

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and UPL could replace and in the benchmark index following the change in guidelines for the computation of the index. 

Earlier this week, India Index Services & Products (IISL) made key changes to the guidelines governing composition and maintenance of indices.

The index provider said companies with free-float (m-cap) of 1.5 times (as against the earlier requirement of two times), the free-float of the smallest constituent can be included in the respective index.

Domestic brokerage Edelweiss, in a note, said this could result in and UPL being part of the Nifty index. “We expect index changes to be announced in a week’s time. And, the same to be effective from September 29,” the note said.

In another note, said Bajaj Finance, UPL and (HPCL) could replace ACC, and The move could see passive funds chasing the new entrants. 

IISL also reduced the time period required for a company to be included in the index after an initial public offering, to three months, from the earlier six months.

First Published: Thu, August 24 2017. 23:58 IST