BSE, IndiGo likely candidates to enter Nifty 50 in upcoming review

Sources tell CNBC-TV18 that BSE and InterGlobe Aviation (IndiGo) are likely candidates to enter the Nifty 50 index as part of the Nifty 50 semi-annual review in August (effective from September).

The reshuffle may see IndusInd Bank and Hero MotoCorp getting dropped from the benchmark index.

As per exchange norms, Nifty inclusions rely on the average six-month free float market cap as of the cutoff date, a key determinant in index eligibility.

Sources add that BSE, despite being listed only on NSE, qualifies to be considered for entry into the Nifty 50. BSE, if it fulfills the condition of its free-float market cap for the preceding 6 months being double that of the 49th and 50th stocks, can qualify to enter both the Nifty 50 and Nifty 100.

According to sources, InterGlobe Aviation, which operates IndiGo, is another candidate that could be considered for entry into the Nifty50.

If confirmed, the reshuffle would see BSE and IndiGo joining the Nifty 50 line-up, while IndusInd Bank and Hero MotoCorp may make their way out.

IIFL, in a note to its clients, said IndiGo has a high probability of entering the Nifty 50, which could bring inflows of $516 million into the stock. IIFL added that BSE has a medium to low probability of entering the Nifty 50.

In the same note, IIFL says that Hero MotoCorp has a high possibility of making its way out of the Nifty 50, whereas IndusInd Bank has a medium to low possibility.

Some market analysts also say that BSE’s rank is right now 127, with a six-month average market cap at ₹76,000 crore.

To get into the Nifty100, it has to go over ₹99,000 crore (the level of the 90th stock), and hence at ₹76,000 crore it won’t get into the Nifty 100. But if it gets into the 90th position, then it will go into the Nifty 50 index.

NSE is yet to respond to CNBC TV18’s query.