Shriram Finance to replace UPL from Nifty tomorrow, likely to see $260 million inflows
Shriram Finance to replace UPL in Nifty, which could trigger inflows. HDFC Bank, Jio Financial, Adani Power to benefit from rebalancing. PSU pack to see weight adjustments. Nuvama estimates significant inflows and outflows in index reshuffle.
will replace in Nifty as part of the index rejig effective on Thursday, March 28. Its entry in the headline index will trigger likely inflows of $260 million, according to estimates given by Nuvama. The stock’s likely weight in the 50-stock index will be 0.7%.On the other hand, UPL which will be exiting the Nifty will see outflows to the tune of $95 million. This stock currently has a 0.2% weight in Nifty.
Shriram Finance has had an uninterrupted run on the exchanges over the past four trading sessions during which it has gained nearly 4%. Its track record over the past 12 months remains impressive as it has rallied 96%, which is a significant outperformance over Nifty with 28% returns in this period.
Contrary to this, the fertiliser stock UPL has witnessed a price erosion of 34% over the last 1-year period. In 2024, so far, it has seen its share price go down by over 21%.
Among other stocks that are expected to remain in focus ahead of the rebalancing are Nifty heavyweights along with Jio Financial Services and . These stocks are expected to be among the biggest beneficiaries of the latest semi-annual adjustment exercise that could trigger cumulative inflows of over $650 million, according to estimates by Nuvama.
HDFC Bank will likely be the second biggest gainer in the pack with inflows of $94 million and will be only behind Shriram Finance. Meanwhile, Jio Financial Services will likely see inflows of $80 million and Adani Power inflows of $45 million, the Nuvama note said.
As part of the rejig exercise, certain stocks are expected to witness outflows as well. The highest outflow is seen in the (SBI $103 million), UPL ($95 million), ($77 million) and ($32 million).
In the PSU pack, state-run , and will see their weights go up in the Nifty CPSE. The adjustment will likely trigger passive cumulative inflows of $94 million according to estimates given by Nuvama.
The lion's share will be contributed by NTPC ($71 million) followed by NHPC ($13 million) and NLC India ($10 million).
NTPC's weight in the Nifty CPSE will go up 20% versus the current weight of 17.9%. As for NHPC and NLC, the new weights post the readjustment will be 4.6% and 1.2% respectively versus 4.2% and 0.9% now.
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Source: Stocks-Markets-Economic Times
