HDFC effect: LTImindtree, Jindal Steel, Mankind Pharma surge up to 3%

Shares of LTIMindtree, Mankind Pharma, and Jindal Steel and Power remained in focus on Wednesday after the National Stock Exchange (NSE) announced replacement of stocks in various indices in the backdrop of the merger of Housing Development Finance Corporation (HDFC) with HDFC Bank. The record date for the amalgamation of HDFC with its subsidiary HDFC Bank is July 13.

The NSE will exclude heavyweight HDFC from 50-stock index Nifty from July 13, 2023, and replace it with IT major LTIMindtree, a part of Larsen & Toubro group. As per Nuvama Alternative and Quantitative Research analysts, LTIMindtree may see an inflow of about $150 million to $160 million from passive funds.

In the Nifty 100 index, HDFC will be replaced by Jindal Steel and Power, and Mankind Pharma in the Nifty 500 index. 

OP Jindal Group’s firm Jindal Steel & Power will also replace LTIMindtree in the Nifty Next 50 index. While pharma major Mankind Pharma will be included in several other Nifty indices, including Nifty Midcap 150, Nifty Midcap 100, and Nifty 200.

Reacting to the news, the shares of LTIMindtree, Jindal Steel, and Mankind Pharma rose up to 3% in the first two hours of trade so far.

LTIMindtree shares gained as much as 3.2% to hit a fresh 52-week high of ₹5,425 on the BSE. With a market capitalisation of ₹1.55 lakh crore, the IT heavyweight shares opened at ₹5,373.05 against the previous closing price of ₹5,254.70. During the trade so far, as many as 0.31 lakh shares changed hands over the counter on the BSE compared with two week average of 0.17 lakh stocks. The stock has risen 41% against its 52-week low of ₹3,834 touched on July 14, 2022.

LTIMindtree, the merged entity of Larsen & Toubro Infotech (LTI) and Mindtree, is the country's fifth-largest IT services provider by market cap after Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies. Last December, the L&T Group companies  LTI and Mindtree were merged to create one of the largest in the Indian IT sector, in a share swap deal at a ratio of 73 shares of LTI for every 100 shares of Mindtree. Parent company L&T holds a 68.69% stake in the merged entity.

In a similar trend, Jindal Steel shares jumped 2.1% to hit a new 52-week high of ₹622.40 on the BSE, while the market capitalisation climbed to ₹63,490 crore. The stock has risen 88% in a year, and 5% in the past six months. In the last one month, the counter has climbed 18%, while it added 6% in a week.

Shares of Mankind Pharma, which recently made its debut on stock exchanges, gained as much as 3% to ₹1,727.55 on the BSE. The stock currently trades 60% higher than its IPO price of ₹1,080 per share. It hit a record high of ₹1,768.05 on June 21, 2023 and an all-time low of ₹1,240.75 on May 22, 2023. The maker of Manforce condoms and pregnancy test kit Prega News listed on the stock exchanges on May 9, 2023.

Meanwhile, shares of HDFC and HDFC Bank fell over 3% each as investors resorted to profit booking after the recent rally. The HDFC twins have snapped five sessions gaining streak today. HDFC Bank and HDFC shares touched their respective 52-week highs on July 3 as investors remained bullish on the stocks post merger on July 1.

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