Nifty criteria may be tweaked before RIL's financial services arm demerger

Current rule could lead to firm's exclusion from index

Samie Modak Mumbai

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NSE Indices is the NSE subsidiary that manages Nifty indices

3 min read Last Updated : Apr 12 2023 | 11:23 PM IST

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Ahead of the proposed demerger of Reliance Industries’ (RIL’s) financial services arm, the National Stock Exchange (NSE) might tweak the framework on addition and removal of stocks in the benchmark Nifty50 index.

Under the present rule, which requires a Nifty constituent to be excluded in the event of its demerger, index heavyweight RIL would have to be removed. That might lead to selling to the tune of Rs 20,000 crore by passive funds, which track the widely popular Nifty50 index.

With a market cap of Rs 15.9 trillion, RIL has the highest weighting of 9.9 per cent in the 50-share index, which is tracked by exchange-traded funds and index funds with assets of over Rs 2 trillion. The company has already initiated a demerger process and the scheme is to be put to the vote before shareholders and creditors on May 2. The demerged entity, Jio Financial Services, is expected to list separately on the bourses by September 2023.