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DLF's position in Nifty index under question

DLF is the only company representing the real estate sector in the 50-share Nifty index

BS Reporter  |  Mumbai 

Sebi’s three-year ban has put at risk DLF’s position in the benchmark NSE index. Proxy advisory and corporate governance firm Institutional Investor Advisory Services (IiAS) has said the order on the real estate major has raised a question mark on whether should continue as a frontline index stock.

At present, is the only company representing the real estate sector in the 50-share index. Exchange-traded funds (ETFs) and other passive investment products tracking the index have to take exposure to all the components of the index. Nifty is the most-traded benchmark index for the Indian market.

“Being part of the CNX Nifty, attracts several equity retail and institutional shareholders. Index funds will also be required to hold the stock in the almost the same measure as its weight in the index. But, with the recent order, must question whether it should remain a constituent of a principal index,” says IiAS. Expulsion from the Nifty index could lead to further selling in the stock by passive funds.

First Published: Tue, October 14 2014. 22:22 IST
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