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Upcoming Nifty 50 Reshuffle: Zomato and Jio Financial Set for Major Inclusion as Bharat Petroleum and Britannia Face Exit

February 23, 2025
Smart Money

India’s Nifty 50 Index Set for Major Reshuffle

The Nifty 50 index, one of India’s leading benchmark stock market indices, is set to undergo a significant reshuffle, with implications for key market players and investors alike. Scheduled for March 28, 2025, this semi-annual rebalancing is anticipated to include notable companies Zomato and Jio Financial Services while removing Bharat Petroleum Corporation and Britannia Industries, according to estimates by brokerage firm JM Financial.

Inclusion of Zomato and Jio Financial Services

The upcoming changes represent a pivotal moment for Zomato and Jio Financial Services. JM Financial predicts that Zomato could see passive inflows of approximately $702 million as a result of its inclusion in the index. Meanwhile, Jio Financial is expected to attract $404 million in inflows. These funds are anticipated to come from index funds that adjust their holdings in response to the reshuffling.

The reshuffle could also spark significant trading activity, with JM Financial estimating that approximately 277 million shares could be acquired by passive funds for Zomato, while Jio Financial may witness 154 million shares being affected. In contrast, Bharat Petroleum and Britannia Industries are expected to experience significant outflows of $240 million and $260 million respectively as they exit the benchmark index.

Impact on the Market

As market participants prepare for these changes, considerable trading volumes are expected. The Nifty 50 undergoes a structured rebalancing process administered by NSE Indices, a subsidiary of the National Stock Exchange (NSE) of India, every six months. These changes are announced with a four-week advance notice, allowing investors and stakeholders time to adjust their strategies accordingly.

Historical trends suggest that inclusion in the Nifty 50 typically leads to a re-rating of stocks and increased institutional interest, particularly from passive funds and exchange-traded funds (ETFs). Stocks that have been added to the index often see substantial price movements in the lead-up to the rebalancing date.

Zomato’s Recent Growth

Zomato’s journey to inclusion in the Nifty 50 reflects its rapid growth trajectory. The company previously made headlines last December when it became the first new-age tech stock to be featured in the BSE Sensex, replacing JSW Steel during a similar rebalancing process. Its continued success has drawn the attention of institutional investors, further underlining its eligibility for inclusion in the Nifty 50. Jio Financial, which was spun off from Reliance Industries in 2023, has quickly gained traction among investors, positioning it as a strong contender for receiving index recognition.

Finalization of Changes

The NSE’s Index Maintenance Sub-Committee is set to meet later today to finalize the list of inclusions and exclusions within the Nifty 50, with an official announcement expected tonight. Market participants and analysts will be closely watching the developments, as the reshuffle could have far-reaching implications for market dynamics and investor strategies.

As the landscape of India’s stock market continues to evolve, these changes in the Nifty 50 will serve as a crucial indicator of shifting trends and investor sentiment within the industry.

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