Info Edge and DMart: Eyeing Nifty Inclusion

Avenue Supermarts and Info Edge India seem to have fair chances of inclusion in the Nifty benchmark index during the upcoming semi-annual review in September 2021.

Avenue Supermarts Limited is a popular retail corporation operating the DMart chain of hypermarkets. It was established in 2002 by Radhakishan Damani. DMart stores offer a wide range of basic and home care products.

Info Edge India is a Noida-based internet technology company that runs various popular online portals. It holds stakes in 23 companies, including two unicorns – PolicyBazaar and Zomato.

What’s brewing here?

Although Info Edge India’s inclusion is a strong possibility, it cannot be said for Avenue Supermarts.

Why so?

Its inclusion will largely depend on whether its stocks become part of the derivatives segment, which is crucial for index inclusion. Although Avenue Supermarts meets the market capitalisation criterion, its stock is still not part of the derivatives segment.

Stocks of these two companies are likely to replace Indian Oil Corporation and Coal India Limited. As a result, these two companies are two major contenders for exclusion from this index.

Info Edge India’s inclusion within the index will increase the technology sector’s significance in this index.

How companies get listed on the Nifty index?

The Nifty index is reviewed twice a year. During these reviews, six months of financial data is taken into consideration. Replacements and changes in the index stocks take effect from April and October’s first working day.

After its inclusion, a stock will become a part of the Nifty index from October. The inclusion’s announcement, however, takes place in August.

What’s the stock market scenario for Avenue Supermarts and Info Edge?

Info Edge India is one of the largest stakeholders of Zomato, which is likely headed for its IPO on 19 July. Its stock price soared 2% at Rs. 5,466.90 on Monday following this news.

Avenue Supermarts shares, however, clocked at 1.39% at Rs. 3,359.20.

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Frequently Asked Questions

How will Indian Oil’s exclusion from the index impact its functioning?

A possible exclusion will cause a weight reduction of 43 points basis with an outflow of $82 million.

What is the total Nifty weightage of the banking, finance, and technology sector?

53%

How will a possible index inclusion impact Avenue Supermarts or Info Edge?

A possible inclusion in the Nifty index will bring fund entries of $110 million and $140 million for Info Edge and Avenue Supermarts, respectively.