Hyundai, Swiggy may join Nifty Next 50 amid index rebalancing changes

The Nifty Next 50 index is regarded as a pool of potential candidates for the flagship Nifty 50 index

Don't want to miss the best from Business Standard?

Hyundai Motor India and Swiggy are expected to make it to the Nifty Next 50 index during the rebalancing exercise slated for next month.

 

The index— seen as a stepping stone for the premier Nifty 50 index— could see as much as seven changes, which could trigger a churn of more than Rs 5,000 crore from passive funds.

 

Besides these two newly-listed firms, Bharat Petroleum Corp (BPCL), Britannia Industries, CG Power and Industrial Solutions, Indian Hotels and Polycab India are seen making it to the Nifty Next 50 index, according to an analysis done by insight provider Brian Freitas of Periscope Analytics, who publishes on Smartkarma.

 

On the other hand, Zomato, Jio Financial Services, Indian Railway Catering and Tourism (IRCTC), Adani Total Gas, NHPC), Bharat Heavy Electricals (BHEL) and Union Bank of India are likely deletions from the index. The removal of Zomato and Jio Financial is on account of their likely addition in the benchmark Nifty 50 index. 

 

Stocks in the Next 50 index are considered as possible candidates for the flagship Nifty 50 index. Together, these two indices make up the Nifty 100 index, an index of top 100 companies in terms of free float market capitalisation, providing a broader representation of the Indian stock market.

 

The entry of Hyundai and Swiggy to the Next 50 index could get thwarted if index provider NSE Indices tweaks the inclusion criteria to include only those stocks in the futures and options (F&O) segment.

 

“With the launch of F&O contracts on the NSE Nifty Next 50 index, there is a possibility that the index universe for the Nifty 100 Index and NSE Nifty Next 50 Index is amended to only include stocks that are F&O members. That could result in Hyundai and Swiggy not being added to the index till they are added to the F&O segment,” said Freitas in a note.

 

Bajaj Holdings and Investment and Adani Power (ADANI IN) are the only non-F&O members part of the Next 50 index at present.

 

The assets under management (AUM) of funds tracking Nifty Next 50 index stands at about Rs 30,000 crore, more than doubling over the past one year. The Nifty 50 index has an AUM of over Rs 4 trillion.