MUMBAI: The National Stock Exchange (NSE) has decided to add the airline major Interglobe Aviation that operates the largest airline Indigo and the hospital-chain Max Healthcare into the benchmark Nifty 50, replacing the troubled lender Indusind Bank and the two-wheeler major Hero Motocorp effective September 30.
The largest bourse said late Friday that both the inclusion as well as the exclusion are part of the semi-annual rejig of the index, based on free float market value of the 50-stock index components. The NSE index subcommittee met to take the calls.
The NSE’s biannual index reshuffle is based on stocks’ average free-float market capitalization over six-month periods ending January 31 and July 31, with the changes implemented in March and September, respectively. The BSE does this recast in every July and December based on the same methodology and principles.
Changes to the Nifty 50 usually lead to reshuffling of exchange traded funds linked to the benchmark index, which could result in several million dollars worth of inflows and outflows for the stocks that are rejigged.
Entry into the index could bring in $400 million for Max Healthcare, while Interglobe may see an inflow of $600 million, according to an estimate by Nuvama in July.
For the year through July-end, shares of Max and Interglobe rose 9.34% and 28.61%, respectively, while those of Indusind fell 17.59%. Hero’s stock was up 1.82%.
