This internet stock may get included in Nifty index in next review

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 2 min read . Updated: 05 Jul 2021, 04:27 PM IST Livemint

The Nifty 50 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.

Info Edge is likely to be included in Nifty in the September review. However, eligibility of Avenue Supermart (DMart) hangs on being part of the futures and options (F&O) segment, as per ICICI Direct.

‘’Considering the average free float market capitalisation since February 1, 2021, we feel Avenue Supermart could enter the Nifty 50 if it is included in F&O segment. While Info Edge has the second highest average free float market cap since February 21, it is eligible to be part of Nifty being already part of F&O segment,’’ ICICI Direct note stated.

Info Edge is emerging to be a major contender for Nifty inclusion in the forthcoming review. The given stock 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, it said.

Based on the index calculation method, ICICI Direct said that Indian Oil Corporation (IOC) has the lowest free cap of last five months, which is likely to be out of Nifty 50 in the coming review. It also expects Coal India to be a possible exclusion from the index.

The BFSI and technology universe holds significant weightage in the Nifty. Currently, these two sectors hold more than 53% of Nifty weightage. With likely inclusion of Info Edge, the weight is likely to move up further. Total number of stocks from these sectors will be 17 effective October.

''Based on the current index methodology, we feel stocks from the oil & gas space would move out as the lowest average free float candidate is from this sector and new entrant would be in technology space,’’ it added.

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