Jio Fin, Zomato part of Nifty50? List of likely F&O inclusions, exclusions

Market regulator Sebi tweaked the selection criteria for stocks to join and exit the derivatives (F&O) segment on Thursday, June 27

Jio Financial, Zomato can be a part of Nifty 50 soon, said a note by Abhilash Pagaria, Head, Nuvama Alternative and Quantitative Research, who believes that these two stocks make it to the futures and options (F&O) segment by the third week of August, both these scrips can be a part of the Nifty 50 index later this year.

“Today’s (June 27) Sebi press conference gives us more confidence in the fast introduction of new F&O members and the removal of names that no longer fulfill the criteria. If we assume Jio Financial Services (JIOFIN) and Zomato make it to the F&O segment before the third week of August, then there is a very high chance of them making it to the Nifty 50 in the September review,” Pagaria wrote.

Index Rejig

The market regulator tweaked the selection criteria for stocks to join and exit the derivatives (F&O) segment on Thursday, June 27. As per Nuvama's understanding, Sebi can introduce new inclusions within few weeks after the official circular of the revised methodology. There are around 65 stocks that meet the criteria, but the final decision remains with Sebi, it said.

“The exit criteria based on performance would be applicable three months after the date of issuance of the circular. So, there are still a few months for exclusions to happen," Nuvama said.

Some of the stocks, according to Nuvama that face removal from the F&O segment as per the revised methodology discussed on June 27 include Balrampur Chini, Can Fin Homes, GNFC, Bata India, Deepak Nitrite, L&T Technology, Dr Lal Pathlabs and Sun TV.

Likely F&O inclusion

On the other hand, some of the stocks that can be included in the F&O segment as per Sebi's revised methodology discussed on June 27 include Zomato, Jio Financial Services, IRFC, BSE, HUDCO, Titagarh Rail, Patanjali Foods, Gland Pharma, Rail Vikas Nigam Limited (RVNL), Ircon International, Angel One, Nuvama said.

The thresholds

The Median Quarter Sigma Order Size (MQSOS) requirement over the last six months has been increased from Rs 25 lakh to Rs 75 lakh on a rolling basis. Likewise, the Market Wide Position Limit (MWPL) has been raised from Rs 500 crore to Rs 1,500 crore.

Likely F&O exclusions

The regulator also stipulates that the Average Daily Value (ADV) over the last six months must not fall below Rs 30 crore, compared to the previous threshold of Rs 10 crore. Additionally, a PSF Framework will be used to evaluate the exit of stocks.