The National Stock Exchange (NSE) on Tuesday tweaked the criteria for selecting stocks for Nifty indices.
Until recently, only companies listed on the exchange were considered for index inclusion. Under the revised framework, NSE will also consider stocks that are not listed on its platform but are permitted to trade. Stock exchanges allow trading in stocks listed on rival exchanges under the so-called ‘permitted to trade’ category.
Currently, there are over a dozen stocks, including Abbott India, Bayer Cropscience, Multi Commodity Exchange of India (MCX) and Nestle India, which are not listed on NSE but are traded in the permitted to trade segment. The move to revise index inclusion criteria could be a precursor for including Nestle India in the benchmark Nifty index. The Swiss consumer goods major’s domestic arm has a market capitalisation of Rs 1.15 trillion. Only 24 out of the 50 Nifty stocks have higher market cap.