Trent, Bharat Electronics poised as contenders for Nifty50 in September

Tata group retailer Trent and state-owned Bharat Electronics (BEL) are seen as likely contenders to the benchmark Nifty50 index during the next rebalancing exercise in September.

If added, both stocks could receive passive inflows in excess of Rs 3,000 crore, as per an analysis by Nuvama Alternative & Quantitative Research. Meanwhile, LTI Mindtree and Divi’s Labs are seen as exclusion candidates. If deleted, both stocks could see outflows of over Rs 1,500 crore from passive funds tracking the Nifty50 index.

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The market cap cut-off as of July-end is considered for calculating the addition and deletion of stocks from the Nifty indices. The official announcement is made during the end half of August and the adjustment takes place on September 30.

While there are several stocks that are ahead of Trent and BEL in terms of their market cap but as they are not part of the derivative segment they are ineligible for qualification.

“Trent is the closest inclusion contender, followed by BEL. As of now, the only stock which is closer to Bel is Hindustan Aeronautics (HAL). If HAL outperforms BEL by more than 20 per cent and stays there till the end of July, then it will have a higher chance,” said Abhilash Pagaria, Head of Nuvama Alternative & Quantitative Research.