HDFC merger effect: RIL, TCS, ICICI Bank may see weight adjustment in Nifty; many stocks to see inflows, outflows
Nuvama Alternative & Quantitative Research. Since HDFC will cease to be part of both Nifty50 and Sensex from July 13, Nifty50 will see the inclusion of LTIMindtree and Nifty Next 50 will see the entry of Jindal Steel after the exit of LTIMindtree from it. Sensex will see the addition of JSW Steel into it.
Read more: LTIMindtree to replace HDFC on Nifty 50 benchmark with effect from 13 July after HDFC Bank takeover Read more: Index rejig: JSW Steel to replace HDFC in Sensex from July 13 As per Pagaria, a major flow impact will be seen in Nifty Bank as HDFC Bank will see an upward weight revision to 29 per cent from 27 per cent in the index. "In the Nifty Bank index, weight addition will be seen in stocks such as HDFC Bank, IndusInd Bank, Bank of Baroda, AU Small Finance Bank, Federal Bank, IDFC First Bank, PNB and Bandhan Bank. Weight reduction will be seen in ICICI Bank, State Bank of India, Kotak Bank and Axis Bank," said Pagaria.
As per Pagaria, after the index rejig Reliance Industries, ICICI Bank, Infosys, ITC and TCS will see some weight down in the Nifty50 index. In the Nifty50 index, the revised weight of HDFC Bank will be 14.43 per cent which will be the highest weight of any single constituent in the index, said Pagaria. The weight up and weight down of the stocks will influence the inflow and outflow into them.
HDFC Bank is expected to see an inflow of about $70 million while ICICI Bank may see an outflow of about $37 million, Pagaria said. IndusInd Bank ($7 million), Bank of Baroda ($3 million), Au Small Finance Bank ($3 million), Federal Bank ($2 million), IDFC First Bank ($2 million), PNB ($1 million) and Bandhan Bank ($1 million) may see an inflow today, Pagaria said. Due to the changes in weightage,
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