Nifty200 Momentum 30 Index to see around 20 changes in June 27 reshuffle

Analysts estimate Rs 16,000 crore in trade from the rebalancing as InterGlobe, HDFC Bank and others gain while M&M and Tech Mahindra face passive outflows

The Nifty200 Momentum 30 Index is set for a significant overhaul on Friday, with as many as 20 of its components expected to be replaced.

 

Analysts predict that the rebalancing will generate trade worth ₹16,000 crore. Several companies, including InterGlobe Aviation (InterGlobe), HDFC Bank, and Kotak Mahindra Bank, could see inflows of nearly ₹600 crore. Conversely, Mahindra & Mahindra (M&M), Eternal, and Tech Mahindra are expected to face passive selling in excess of ₹550 crore, according to an analysis by Brian Freitas of Periscope Analytics, published on Smartkarma.

 

“Based on the expected changes to the index and capping of the index weights, one-way turnover is estimated at 68.4 per cent, resulting in a round-trip trade of ₹16,000 crore ($1.9 billion). There are 22 stocks with over one-day average daily volume to trade,” said Freitas.

 

Financial stocks dominate the inclusion list, with 11 companies (nine on a net basis), followed by materials and industrials with three each. Meanwhile, consumer discretionary and information technology sectors lead the exclusion list, with six and four companies, respectively. 

 

NSE Indices announced the changes to the Nifty200 Momentum 30 Index on June 6, which will be implemented at the close on June 27. The Nifty200 Momentum 30 Index tracks the performance of the top 30 companies from the Nifty 200 Index, selected based on their “normalised momentum score” (NMS).

 

The NMS is calculated using six- and 12-month price returns, adjusted for volatility. The weightage of each index component is derived by multiplying the free float market cap with their NMS.

 

Only stocks that are part of the Nifty200 index, listed in the derivatives segment, and have a listing history of at least one year are eligible for inclusion. The Nifty200 Momentum 30 Index is rebalanced half-yearly in June and December.

 

Additionally, components in the Nifty 50, Nifty Next 50, Nifty Bank, Nifty CPSE, Nifty Midcap 150, and Nifty Smallcap 250 will also undergo rebalancing of their weightages on Friday.