Trent and Bharat Electronics (BEL) can attract inflows of around $900 million if they enter the Nifty 50 index in the September review. The changes will be announced on August 23 and the adjustments will take effect on September 30.
The two stocks will replace LTIMindtree and Divi’s Laboratories, according to Sriram Velayudhan, senior vice president – alternative research at IIFL Institutional Equities.
Trent can see inflows of around $470 million and BEL around $410 million, according to the brokerage.
Key changes are also expected in the Nifty Bank and other major indices. The brokerage expects Canara Bank to replace Bandhan Bank in the Nifty Bank index.
In anticipation of the announcement, shares of Trent surged 23% in the last one month while BEL and Canara Bank were down 3% and 7%, respectively.
Inclusion in the Nifty Bank could lead to inflows of $79 million in Canara Bank while Bandhan Bank may see outflow of $40 million on possible exclusion.
The indices are tracked widely for passive investments. As per NSE, $$88.1 billion worth of passive assets under management track Nifty indices.
According to the exchange, only those stocks that are allowed for trading in the futures and options segment are eligible for entering the benchmark index.
Earlier, there were expectations that Zomato and Jio Financial could have a shot at making it to the Nifty if Sebi approves the inclusion of these stocks in the derivatives segment. However, the regulator is yet to announce the proposed new norms for stocks trading in the F&O segment, and the potential changes to the list of stocks currently trading in the segment.