Internet technology company Info Edge (India) or DMart retail chain operator Avenue Supermarts is likely to be a part of the Nifty50 from the October series.
According to a report by ICICI Direct, Info Edge has emerged as a major contender for inclusion in Nifty in the forthcoming September review.
“Info Edge is likely to be included in the Nifty from the October series. The announcement for the same from the NSE is expected to be made sometime in August,” the report by ICICI Direct said.
The index is reconstituted semi-annually considering six months’ data ending January and July. The replacement of stocks in the Nifty 50 (if any) is generally implemented from the first working day of April and October.
In case of any replacement in the index, a four weeks’ prior notice is given to market participants.
Considering the average free float market capitalisation since February 1, 2021, ICICI Direct feels Avenue Supermarts could enter the Nifty50 if it is included in the F&O segment.
Info Edge, however, has an edge over Avenue Supermarts as it is already eligible to be added in Nifty being a part of F&O segment, the brokerage house said.
Further, it added that based on the index calculation method, Indian Oil Corporation (IOC) has the lowest free float market capitalisation, which would be excluded from the Nifty50 basket.
Meanwhile, the expected rebalancing in the index could also change the Nifty sectoral composition, as per the report.
“The BFSI and technology universe holds significant weightage in the Nifty. Currently, these two sectors hold more than 53 percent of Nifty weightage. With likely inclusion of Info Edge, the weight is likely to move up further. A total number of stocks from these sectors will be 17 effective October,” ICICI Direct said.