JM Financial anticipates Trent, BEL to join Nifty50 in August indices rebalancing

livemint.com:

Trent Ltd and Bharat Electronics Ltd (BEL) to join the Nifty50 index in this rebalancing exercise. If included, Trent Ltd and BEL could see expected inflows of $412 million and $392 million, respectively.Also read: FMCG stocks: Steady monsoon, social welfare thrust likely to aid growth, says Anand Rathi; lists top picksNSE Indices rebalancing announcement is scheduled in the month of August, effective from September 30.The brokerage firm said in its report, "For the September rebalancing, the index provider assumes an average free float market cap between the period February 1 to July 31.

Based on the average free float market cap till now, we expect the following changes in the Nifty Inclusions - Trent (TRENT) and Bharat Electronics (BHE)Exclusions - LT Mindtree (LTIM) and Divis Laboratories (DIVI)"However, LTIMindTree Ltd and Divis Laboratories Ltd (Divis Labs) are expected to be replaced in the next rebalancing. According to a note from JM Financial, this replacement will likely result in outflows of $180 million and $224 million, respectively.

The index provider will consider the average free-float market capitalization between February 1 and July 31 for the September rebalancing.The brokerage also noted that Jio Financial Services Ltd (Jio Fin) and Zomato Ltd have a higher average free-float than Trent and BEL. However, their exclusion from the F&O segment prevents their inclusion in the Nifty50 index, as cash market counters cannot become index constituents.Also read: Stocks to buy: Axis Bank, Dr Lal Pathlabs among top four stock picks by SMC Global Securities for this week"It is interesting to note that JOFIN and ZOMATO have an average free float market cap higher than TRENT and BHE.