Jio Financial, Zomato May Replace These Heavyweights On Nifty 50

Jio Financial Services Ltd. and Zomato Ltd. are likely candidates to be included in India's benchmark Nifty 50 in the semi-annual rejig in March, according to JM Financial. Bharat Petroleum Corp. and biscuit-maker Britannia Industries Ltd. may face exclusion from the index.

Nifty is re-balanced on semi-annual basis by NSE Indices Ltd., an arm of the country' top bourse. The cut-off date is Jan. 31 and July 31 of each year, which means, the average data for six months ending the cut-off date is considered. The firm gives a four weeks prior notice to the market from the date of change.

The Nifty constituent changes are due in February and effective March 31. JM Financial's projection is based on the average free float market cap that prevailed as of Jan. 12.

Should it happen, Zomato may see an inflow of $620 million or Rs 5,364 crore, which is 3.8 times its average daily trading volume.

Jio Financial Services Ltd. will also see inflow of $356 million or Rs 3,080 crore, amounting to 6.1 times its average daily volume.

On the other hand, BPCL is expected to face an outflow of $212 million or Rs 1,833 crore, which is 10 times its average daily volume, while Britannia is projected to see an outflow of $229 million or Rs 1,981 crore , nearly 9.8 times its average daily volume.

According NSE Indices' eligibility criteria, for a stock to qualify for possible inclusion into the Nifty 50, it should have traded at an average market impact cost of 0.5%, or less during the last six months for 90% of the observations, for the basket size of Rs 10 crore. Moreover, only companies that are allowed to trade in futures and options segment are eligible to be constituent of the index.