Nifty Reshuffle Decision Anticipated: Will Zomato and Jio Financial Join the Top 50?
Date: February 21, 2025
As market participants eagerly await the results of the Nifty 50 index’s semi-annual reshuffle, analysts suggest that notable changes could take place in India’s leading stock benchmark. The Indian stock market is bracing for an announcement from the National Stock Exchange’s (NSE) Index Maintenance Sub-Committee, set to finalize adjustments in the index today after market hours.
Potential New Entrants
According to estimates from JM Financial, two prominent contenders are expected to join the ranks of the Nifty 50 – Zomato, the food delivery giant, and Jio Financial Services, a company spun off from Reliance Industries. Their anticipated inclusion is garnering attention due to the significant trading volumes and passive inflows they could attract.
Estimated Inflows
JM Financial has projected that Zomato could see an influx of approximately $702 million from passive funds as they adjust their holdings following the inclusion in the index. Similarly, Jio Financial is expected to receive $404 million. This influx is likely to influence the stock performance of both companies positively.
Expected Exits from the Index
Conversely, the reshuffle may see Bharat Petroleum Corporation and Britannia Industries dropped from the Nifty 50. As a result, they are projected to experience outflows of $240 million and $260 million, respectively. These companies may witness a significant unwind of positions from index-tracking funds.
Anticipated Trading Volume Changes
The adjustments are foreseen to trigger notable trading volumes. JM Financial anticipates that Zomato could have around 277 million shares purchased by passive funds, while Jio Financial may witness about 154 million shares affected by the inflow. On the other hand, Bharat Petroleum and Britannia are expected to see 78 million and 4.4 million shares sold in response to their exit.
The Semi-Annual Rebalancing Process
The Nifty undergoes a semi-annual rebalancing process facilitated by NSE Indices, the subsidiary of India’s largest stock exchange. This structured review is conducted every January 31 and July 31, evaluating stocks based on their performance over the previous six months to ensure that the index mirrors the current market conditions accurately. The advanced notice of four weeks prior to implementing any changes is designed to allow market participants to adjust their strategies accordingly.
Context of Zomato and Jio Financial Services
Zomato’s rapid rise was previously marked by its inclusion in the BSE Sensex last December, making it the first tech stock from the new age to enter the prominent index. On the other hand, Jio Financial, which was demerged from Reliance Industries in 2023, has been gaining traction among institutional investors, further solidifying its position as a strong candidate for inclusion in the Nifty 50. ## Looking Ahead
The Nifty 50’s reshuffle is a widely watched event, and the final decisions will officially impact the index as of March 28, 2025. Market participants will be closely monitoring the outcome of today’s meeting for any updates on the final list of inclusions and exclusions.
This reshuffle not only reflects the dynamics of the stock market but also indicates broader shifts within the Indian economy, underscoring the growing significance of technology-driven companies like Zomato and Jio Financial in the modern trading landscape.