NSE announces five additions, deletions each to Nifty Next 50 Index

CHOP & CHANGE: Potential Rs 2,100 crore one-way churn on stock performance of 10 companies

The index provider arm of the National Stock Exchange has announced five additions and deletions each to the Nifty Next 50 Index.

Analysts have stated that this rebalancing could significantly affect the stock price performance of these 10 companies, resulting in a one-way churn of nearly Rs 2,100 crore.

The number of shares required to be bought or sold for these companies ranges from 2 to 11 days’ worth of average delivery volumes.

The five stocks added to the index are Shriram Finance, Trent, TVS Motor Company, Punjab National Bank, and Zydus Lifesciences.

In terms of flow, Shriram Finance is expected to experience the highest buying by passive trackers, but the most substantial impact might be felt in Tata Group’s retail arm, Trent. This is due to the cumulative buying requirement of 11 days’ worth of its delivery-based volume.

Conversely, Page Industries could be hit the hardest due to the deletion.

According to insight provider Brian Freitas, a New Zealand-based analyst with Periscope Analytics who publishes on Smartkarma, the apparel company will witness selling by passive trackers totalling Rs 322 crore, which represents almost six days of cumulative delivery-based volume.

Furthermore, Procter & Gamble Hygiene & Health Care, Bajaj Holdings, Avenue Supermarts, and Adani Total Gas will also see positive flows due to an increase in their weighting.

This rebalancing is part of the semi-annual review of the Nifty indices and will take effect after the close of trading on September 28.