Bharat 22 rebalance to set off selling in ITC and Nalco, shows data

Churn is by reason of changes to weighting of existing components

Shares of ITC and National Aluminium Company are expected to see selling by passive trackers to the tune of Rs 563 crore and Rs 186 crore, respectively, on account of a rebalancing in the S&P BSE Bharat 22 Index.

Meanwhile, Oil and Natural Gas Corporation will see buying worth Rs 203 crore. NTPC (formerly National Thermal Power Corporation) will get inflows of Rs 181 crore, according to an analysis by Brian Freitas, a New Zealand-based analyst with Periscope Analytics.

While zero stocks have been added or removed from the Bharat 22 index, the churn is by reason of changes to the weighting of existing components. These changes will be effective on March 17. The exact inflows and outflows will depend on the March 15 closing price.

The Bharat 22 exchange-traded fund is tracked by funds with assets of close to Rs 10,000 crore. The index was formed to facilitate government disinvestment. The index has 22 companies across public sector undertakings, state-owned banks, and companies where the Specified Undertaking of Unit Trust of India holds a stake.

“There are no constituent changes for the indices in March. But there will be capping changes for stocks and a reasonable impact on a few,” observes Freitas.