Home / Markets / Stock Markets /  Nifty rejig: Indian Oil could be replaced by either of these 2 stocks in index
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Edelweiss Alternative Research has done a pre-emptive analysis of the Semi-Annual Index Rejig of Nifty Indices which will officially be announced in the second half of February 2022. The brokerage house's analysis comprises of the flow wise impact in inclusion and exclusions of all the indices followed by passive funds, namely- Nifty 50, Nifty Bank, Nifty IT and Nifty Next 50.

Edelweiss' research team believes that Indian Oil Corporation (IOCL) holds a good chance of being excluded from the Nifty index, while the stock that can dislodge IOCL can be either Apollo Hospitals or Info Edge (Naukri). 

“As per our calculations, we believe that APHS holds slightly higher chance than Info Edge. Currently, both the stocks are 1.5x above, Indian Oil’s Free Float Market cap," the brokerage added. 

Inclusion of Apollo Hospitals could lead to inflow of $175 million whereas, that of Info Edge could potentially witness $144 worth of inflows. Meanwhile, Indian Oil's exclusion will lead to outflows of $100 million, as per Edelweiss' estimates. 

Though, a significant price rise in the next three weeks which if maintained till cut-off date, which is January 31, 2022, can save IOCL from the exclusion. Similarly, the two potential names should also hold the current price with limited slid till cut-off date.

The most important criteria for Nifty Inclusion is that the stock should compulsorily be a part of the Derivative segment. 

"Avenue Supermart’s (DMART) Average Free Float Market cap is significantly higher than most of the existing constituents, but the stock is still not getting included in Nifty 50 Index for the past few reviews as it is not a part of F&O segment. If the stock gets included in derivatives till announcement date, then it will for sure be a Nifty 50 member," Edelweiss note added.


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