The National Stock Exchange (NSE) Indices Limited has announced significant changes to the composition of several key indices, effective September 30, 2024 (close of September 27, 2024). This rebalancing affects the NIFTY 50, NIFTY Bank, NIFTY Next 50, and NIFTY Midcap Select indices, reflecting the dynamic nature of India's equity markets.
NIFTY 50, the benchmark index representing the Indian equity market, will see two companies exiting - Divi's Laboratories (NS:DIVI) Ltd. (DIVISLAB) and LTIMindtree Ltd. (NS:LTIM). These will be replaced by Bharat Electronics Ltd. (NS:BAJE) (BEL) and Trent (NS:TREN) Ltd. (TRENT), bringing fresh representation to the index.
In the banking sector, Nifty Bank index will witness the exclusion of Bandhan Bank (NS:BANH) Ltd. (BANDHANBNK), making way for Canara Bank (NS:CNBK) (CANBK). This change could signify shifts in the relative performance and market capitalization of these banking entities.
The NIFTY Next 50, often viewed as a precursor to future NIFTY 50 entrants, undergoes a more extensive revision. Seven companies are set to exit this index: Berger Paints India Ltd (NS:BRGR)., Bharat Electronics Ltd., Colgate (NS:COLG) Palmolive (India) Ltd., Marico (NS:MRCO) Ltd., SBI Cards and Payment Services (NS:SBIC) Ltd., SRF Ltd. (NS:SRFL), and Trent Ltd. Their places will be taken by Bharat Heavy Electricals Ltd. (NS:BHEL), Divi's Laboratories Ltd., JSW Energy (NS:JSWE) Ltd., LTIMindtree Ltd., Macrotech Developers (NS:MACE) Ltd., NHPC (NS:NHPC) Ltd., and Union Bank of India (NS:UNBK).
The NIFTY Midcap Select index also sees notable changes. Four companies - Jubilant Foodworks (NS:JUBI) Ltd., Page Industries Ltd. (NS:PAGE), UPL Ltd (NS:UPLL)., and Vodafone Idea (NS:VODA) Ltd. - will be removed from the index. They will be replaced by Colgate Palmolive (India) Ltd., Dixon Technologies (India) Ltd., Indus Towers (NS:INUS) Ltd., and SRF Ltd.
These changes reflect the evolving landscape of the Indian corporate sector, with some companies moving up the ladder to larger indices while others face exclusion. The rebalancing ensures that the indices remain representative of the current market scenario, providing investors with a more accurate reflection of the Indian economy and its various sectors.
Investors and market participants should take note of these changes as they may impact portfolio allocations, especially for index-tracking funds and ETFs. The reshuffling also offers insights into the changing fortunes of various companies and sectors within the Indian economy.
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