Mumbai: The benchmark index of the National Stock Exchange (NSE) Nifty 50 will reshuffle its composition on Friday. With Bajaj Finance, Hindustan Petroleum Corporation Ltd (HPCL) and UPL Ltd replacing ACC, Bank of Baroda and Tata Power and shares of Tata Motors DVR, the weightage of private financials in the index will increase by 60 basis points (bps) while PSU Banks will hit new low at 2.5% said Motilal Oswal Securities Ltd. This is also the first time when all the three oil marketing companies (OMCs) will be part of the index.

Post this reshuffle, banking, financial services and insurance (BFSI) will have an index weight of 35.8%, almost equivalent to the combined weights of oil, technology and auto sectors.

The brokerage firm said top five stocks to be most impacted (in terms of weight) by the reshuffle are HDFC Bank Ltd, Housing Development Finance Corporation Ltd, Reliance Industries, ITC Ltd and ICICI Bank.

Motilal Oswal also said that in 2017, the Nifty saw the highest number of stocks reshuffled in a particular calendar year as total seven stocks have been rejigged. Weights of IndusInd Bank and YES Bank in the index are at new highs-up 2.6 times and 2.1 times, respectively from the time these stocks entered the index. Tech Mahindra’s weight has halved. Lupin’s weight is down significantly from its peak of 1.6% to 0.6% due to its underperformance over the past two years, it said in a report on 27 September.

According to Motilal Oswal, post reshuffle earnings per share (EPS) of Nifty for FY18 will see marginal upgrade of 0.2% but will see a downgrade of 0.4% for FY19, primarily due to a higher increase in free float market cap of 1.6% compared to a rise of 1.8% and 1.1% in free float net profit for FY18 and FY19 respectively.

It estimates Nifty EPS at Rs491 for FY18 and at Rs605 for FY19. “Nifty trades at a price to earnings (PE) of 20.4 times on FY18 earnings based on current composition which will remain unchanged post reshuffle. However, based on FY19 earnings,Nifty PE will expand marginally from 16.4 to 16.5 times post the reshuffle," it said.

Meanwhile, Nifty Midcap-100 composition will also a change along with other NSE indices. Healthcare will take number one spot in allocation of Midcap-100 weights at 12.1% , replacing non-banking financial company (NBFC) which will shed 270 bps to 10.5%. Oil & Gas’ weight will decline by 180 bps to 3.3% due to exclusion of Petronet LNG from the Midcap-100 index. Avenue Supermarts Ltd will be included in Midcap-100 with 0.7% weight, taking retail’s weight to 2.2%.