Market

NSE revises eligibility criteria: This stock may get Nifty50 index entry ticket now

Updated : August 21, 2019 01:04 PM IST

As per to the new rules, all equity shares that are traded are eligible for inclusion in the Nifty indices now.

Post this revision, Edelweiss Securities expects Nestle to qualify for inclusion in the Nifty50 index.

The brokerage expects Nifty constituent ZEE to be excluded to make way for the FMCG major's inclusion.

The National Stock Exchange (NSE) on Tuesday revised the eligibility criteria for inclusion of stocks on the Nifty index. As per the new rules, all equity shares that are traded (listed and traded as well as those not listed but permitted to trade on the exchange) are eligible for inclusion on the Nifty now.

Earlier, only those equity shares that were listed and traded on the exchange were eligible for inclusion.

NSE, however, said, "Convertible stocks, bonds, warrants, rights, preferred stocks that provide a guaranteed fixed return and stocks under the BZ series are not eligible for inclusion in the indices."

The BZ series includes companies that have failed to comply with the listing requirements or have not resolved investor complaints.

Following the revision, Edelweiss Securities expects Nestle to qualify for inclusion in the Nifty50 index. The brokerage expects Nifty constituent ZEE to be excluded to make way for the FMCG major.

Nestle India has risen over 10 percent in 2019 and around 14 percent in the last 1 year despite demand slowdown. In comparison, the BSE FMCG index has fallen 8 percent in 2019 and 13 percent in the last 1 year. On Wednesday, the stock jumped 4.5 percent to a 52-week high of Rs 12,500.

Zee Entertainment, on the other hand, has fallen over 25 percent in 2019 and over 30 percent in the last 1 year. Today the stock dropped as much as 1.8 percent to Rs 344.

The changes in the eligibility criteria were made after a review by the Index Maintenance Sub-Committee of NSE Indices Ltd.

At the end of July, there were 1,950 listed shares on the NSE, while 1,887 were available for trading. Shares of as many as 18 companies, which were not listed, were allowed to trade at the end of the month, according to the exchange data.

NSE revises eligibility criteria: This stock may get Nifty50 index entry ticket now

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