IndusInd Out, IndiGo In: Nifty 50 Braces For Major September Shake-Up
The official announcement of the Nifty reshuffle is expected in the second half of August, with the changes taking effect from the end of September.
The NSE Nifty 50 is gearing up for a significant reshuffle in September, with IndusInd Bank Ltd. set to make way for InterGlobe Aviation Ltd., the operator of IndiGo airlines.
IndiGo and Max Healthcare Institute Ltd. are the high-conviction additions to the benchmark index, while IndusInd Bank and Hero MotoCorp are likely to be shown the door, according to Nuvama Alternative & Quantitative Research.
The rejig, effective Sept. 30, is expected to trigger large passive flows. IndiGo could see inflows of nearly $507 million, while Max Healthcare may attract $423 million. On the flip side, IndusInd Bank and Hero MotoCorp are projected to witness outflows of $240 million and $251 million respectively
The official announcement of the Nifty reshuffle is expected in the second half of August, with the changes taking effect from the end of September.
The Nifty Next 50 is likely to see the inclusion of Solar Industries, Siemens Energy, Mankind Pharma, Hindustan Zinc and Union Bank of India, while stocks that are expected to be out of the index include Dabur, ICICI Prudential Life Insurance and Swiggy.
IndusInd Bank and Hero MotoCorp will be slipping to the Nifty Midcap 50. In the quarter ended June, the lender reported a standalone net profit of Rs 684 crore, recovering from a loss of Rs 2,236 crore in the previous quarter. This marks the second quarterly disclosure since the derivative accounting controversy that had previously shaken investor confidence and raised questions about governance and succession planning.
IndiGo's June-quarter profit had fallen 20%, however it met analysts' estimates. Profit of the operator of India's largest airline fell to Rs 2,176.3 crore, according to an exchange filing on Wednesday. This compares with the Rs 2,213.9-crore consensus estimate of analysts tracked by Bloomberg.
"The June quarter was shaped by significant external challenges that created headwinds for the entire aviation sector," Chief Executive Officer Pieter Elbers had said.
"While the revenue environment saw moderation, demand for air travel held strong as we served more than 31 million passengers during the quarter, reflecting a growth of around 12% on a year-over-year basis," he stated.
