Street signs: RIL becomes top index weight, Vedanta deal, and more

RIL becomes top index weight

Following a stupendous rally in its share price, Reliance Industries (RIL) has become the company with highest weighting on the benchmark Nifty and Sensex indices. According an analysis done by a brokerage, RIL has become the most important stock in the blue-chip indices after nearly a decade. HDFC Bank, which enjoyed the top slot during the start of the year, has slipped to the second spot, despite its high public float. Interestingly in 2015, RIL wasn’t even in the top five. Analyst say, once the mega rights issue concludes, the Mukesh Ambani-led company’s weighting will go up even further.

Samie Modak

Broad-market indices outdo Nifty

The broader market mid-cap and small-cap indices have outperformed the benchmark Nifty so far this month. Last week, both Nifty Midcap 100 and Smallcap 100 indices posted gains, even as the Nifty declined over 1 per cent. On a month-to-date basis, they are down 3.5 per cent, as against a 7.3 per cent decline in the Nifty. Market experts say, traders are shifting focus to stocks in the broader market. “With the Nifty taking a breather, action has shifted to the mid-cap space. This trend may continue as further consolidation is expected in the Nifty in the coming week,” said a derivative analyst.

Sundar Sethuraman

Traders eye Vedanta deal sweetening
 

Many savvy investors are building positions in Vedanta on hopes that the promoters will raise the delisting price. Promoter Vedanta Resources has announced to take private Vedanta at an indicative price of Rs 87.5, which is lower than the last closing price of Rs 92.6. “Going by the precedence, the final delisting price is always way higher than the indicative price. Also, in case of Vedanta, the indicative price is way below the book value. If the promoters are serious about delisting, the stock price should tread higher,” said an analyst, who expressed surprise at the relatively muted market reaction to the delisting news. In the past, stocks have exhibited surge spurts whenever promoters have made public their intention to delist.

Samie Modak