Divi's Laboratories, SBI Life Insurance shares gain on Nifty inclusion

Divi’s Laboratories and SBI Life Insurance shares gained 2.3 per cent and 1.3 per cent, respectively, on Friday, when the National Stock Exchange (NSE) announced that the two companies will be included in the benchmark Nifty50 index. 

Shares of Zee Entertainment Enterprises fell 3.7 per cent and that of Bharti Infratel ended flat. The two companies will be removed from the bluechip index.

Analysts said Divi’s could see buying worth Rs 750 crore from exchange trade funds (ETFs) and SBI Life will see passive flows worth Rs 624 crore. Meanwhile, outgoing candidates Zee Entertainment Enterprises and Bharti Infratel will see outflows of Rs 650 crore in total.

As part of its semi-annual index review, NSE on Thursday announced these changes to the Nifty 50 index, which is estimated to be used as an underlying by exchange traded funds (ETFs) with assets of nearly Rs 90,000 crore.

The changes will take effect from September 25, a day after expiry of the next month’s derivatives contract.

Edelweiss analysts Sriram Velayudhan and Abhilash Pagaria in a note said Divi’s will have a weighting of 0.83 per cent and SBI Life 0.69 per cent.

Divi’s has made it to the index on the back of strong gains this year. From this year’s lows, the stock has surged 80 per cent to Rs 3,261 amid strong buying momentum in pharma stocks.

SBI Life will join HDFC Life in becoming only the second insurance company to get added to the index. Shares of SBI have gained 62 per cent from their lows in March. In comparison, the Nifty is up 50 per cent.