The Nifty50 could see one of its biggest rejig, predict analysts at ICICI Direct. The sharp correction in equities because of the Covid-19 pandemic has seen the market cap of several existing components fall sharply. The free-float market cap of many other stocks, which are currently not part of the index, has surged past them. Index inclusion prospects are tied to free-float market cap (total market cap minus value of shares held by promoters or those under lock-in). “We believe the upcoming Nifty review in September will be the biggest reshuffle seen in recent history. Perhaps, we may see a change of four stocks in the review,” says ICICI Direct. Bharti Infratel, Vedanta, Zee Entertainment, Tata Motors, and Gail could be on their way out. Avenue Supermarts (Dmart), Divi's Labs, HDFC Life, Dabur, and SBI Life could become part of the bluechip index.
While Dmart currently has the highest free-float market cap —thanks to the recent dilution of promoter stake — the stock is not yet part of the derivatives market. Dmart could be added to the list of derivatives stocks — a prerequisite for index inclusion — before August when the next semi-annual review is likely to take place. The changes are announced usually in August and they take effect from September.