NSE Rejig: BEL, Trent To Replace Divi's Lab, LTIM On Nifty 50, Shares Rally; What Will Change From Sept 1?

NSE Indices Rejig: Zero-debt defence giant Bharat Electronics (BEL) and Tata Group-backed retail giant, Trent Ltd are going to enter the Nifty 50 benchmark, which will lead to massive inflows in the two stocks. They are replacing pharma major Divi's Laboratories and L&T Group's LTIMindtree on the 50-scrip benchmark. A host of other stocks have been excluded and included on NSE, which will come into effect from September 1, 2024. All four stocks that are going to see major rejig are in green on Monday, August 26, 2024.

As per the statement, the Index Maintenance Sub-Committee (Equity) of NSE Indices Limited has decided to make changes in various Nifty equity indices as listed hereunder. These changes shall become effective from September 30, 2024 (close of September 27, 2024).

This is part of NSE's semi-annual review of broad market indices.

The biggest change was in the Nifty 50.

Nifty 50 Rejig:

Bharat Electronics Ltd and Trent Ltd will be included from September 1, 2024, while Divi's Laboratories and LTIMindtree will be excluded.

In its official statement, NSE said, Trent Ltd. (average free-float market capitalization Rs. 99,364 crores) and Bharat Electronics Ltd. (average free-float market capitalization Rs. 89,317 crores) has been included in the Nifty 50 index as the 6-month average free-float the market capitalization of these companies within the eligible universe is at least 1.5 times the 6-month average free-float market capitalization of the smallest constituents i.e. LTIMindtree Ltd (average free-float market capitalization Rs. 47,022 crores) and Divi's Laboratories Ltd. (average free-float market capitalization Rs. 51,261 crores) respectively.

Following the development, BEL's share price surged by nearly a per cent to touch an intraday high of Rs 308.90 apiece on NSE. While Trent shares also gained by 1.2% to touch an intraday high of Rs 7,031.90 apiece.

Surprisingly, Divi's Lab and LTIMindtree also advanced in the early trade of August 26th, despite the upcoming exit from Nifty 50.

Divi's Lab surged by 1.4% to hit an intraday high of Rs 4,922 apiece, while LTIMindtree outperformed the other three stocks with gains of over 1.7% to hit an intraday high of Rs 5,739 apiece.

Earlier, as per the JM Financial report, the inclusion of Trent and BEL will lead to an inflow of $523 million and $394 million from September 1, 2024.

On the other hand, JM's note highlighted that the exclusion of Divi's Lab and LTIMindtree would result in an outflow of $205 million and $221 million respectively.

The above replacement will also be applicable to the Nifty50 Equal Weight index.

Nifty Next 50 Rejig:

On tis index, BEL, Trent, Berger Paints, Colgate Palmolive Marico, SBI Cards and Payment Services, and SRF are being excluded.

NSE said Bharat Electronics Ltd. and Trent Ltd. have been removed from the Nifty Next 50 on account of their inclusion in the Nifty 50 index.

The stocks to be included on Nifty Next 50 are -- Bharat Heavy Electricals (BHEL), Divi's Laboratories, JSW Energy, LTIMindtree, Microtech Developers, NHPC, and Union Bank of India.

In regards to inclusion, NSE said, "Constituents of Nifty 50 and Nifty Next 50 indices are derived from Nifty 100 index (a parent index). All 7 constituents in the table above which are constituents of reconstituted Nifty 100 (but not part of Nifty 50) have been included in Nifty Next 50 index."