Zomato upends tradition with Sensex entry

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Subscribe to enjoy similar stories. Zomato will make history on Monday as the first new-age tech stock to be included in the prestigious BSE Sensex, replacing JSW Steel in a half-yearly rebalancing of constituents. This signals a significant shift in the Indian business landscape.

While the rejig is routine, the food delivery giant's inclusion in the club of India's most influential companies underscores the growing prominence of the digital sector. Historically, the 30-stock blue-chip index has seen considerable churn. Just eight of the earliest constituents from 1986 are still part of the index.

The Sensex underwent a dramatic overhaul in 1996, with 15 of the 30 stocks making way for a new guard. Today, just a third of the companies in the index are old-timers from about a decade ago, and in the past four years, one-sixth of the names have fallen off the list.A long-term analysis of this rebalancing shows the extent of the competition. Zomato's inclusion in the index has been fuelled by a relentless rally in its stock.

Shares of the Deepinder Goyal-led company have surged 45% in the last six months and 133% in 2024 so far. The Sensex meanwhile has gained just 10% this year. This surge has propelled Zomato's market capitalisation to ₹2.1 trillion.

In contrast, JSW Steel's stock has risen only 1.1% in the past six months and 5% year-to-date. Also read: Zomato is built on a cult of personality. Here’s why it works—until it doesn’t Zomato's financial turnaround is the engine powering this rally.