Nifty50 reshuffle: IndiGo, Max Healthcare to enter index; IndusInd Bank, Hero MotoCorp to exit

The National Stock Exchange (NSE) benchmark Nifty50 is set for a major reshuffle today, with budget airline operator InterGlobe Aviation (IndiGo) and hospital chain Max Healthcare set to join the index. On the other hand, long-standing members IndusInd Bank and Hero MotoCorp will exit the benchmark index.

According to market analysts, Nifty rejig indicates the rise of aviation and healthcare as powerful themes in India’s growth story.

As per the NSE, InterGlobe Aviation, with an average free-float market capitalisation of ₹1,13,908 crore, and Max Healthcare, at ₹84,555 crore, earned their place by outpacing peers in the eligibility sweepstakes.

“InterGlobe Aviation Ltd. (average free-float market capitalisation ₹113,908 crores) and Max Healthcare Institute Ltd. (average free-float market capitalisation ₹84,555 crores) have been included in the Nifty 50 index based on higher 6-month average free-float market capitalisation within the eligible universe as a replacement to Hero MotoCorp Ltd. and IndusInd Bank Ltd,” the NSE had said in a statement on August 22.

The reshuffle is expected to trigger passive fund flows into IndiGo and Max Healthcare as index-tracking funds adjust their portfolios. Nuvama Alternative & Quantitative Research estimates that the latest Nifty50 reshuffle will trigger net inflows of about $1.07 billion into the benchmark index, against expected passive outflows of nearly $747 million.

As per the report, InterGlobe Aviation is projected to attract the largest inflows at around $362 million, followed by Max Healthcare at $340 million. Among others, State Bank of India is expected to see inflow of ($80 million), Siemens Energy India ($53 million), and Solar Industries ($46 million).

On the other hand, Hero MotoCorp and IndusInd Bank are likely to witness outflows of $284 million and $205 million, respectively. Among the incumbents, ICICI Bank ($57 million), Reliance Industries ($52 million), and HDFC Bank ($52 million) are also expected to see reductions.

The report further highlighted that adjustments in stock weightages will additionally drive inflows into SBI ($99 million, 1.2x ADV), ITC ($38 million, 0.6x ADV), and Bajaj Finserv ($19 million, 0.7x ADV). At the same time, lower weights are anticipated to push outflows from HDFC Bank ($66 million, 0.4x ADV), Reliance Industries ($52 million, 0.3x ADV), and ICICI Bank ($47 million, 0.3x ADV).