Whalesbook
Axis Capital anticipates a significant reshuffle of the Nifty 50 index during its upcoming September review. The firm's analysis suggests that BSE is likely to replace Wipro in the main index. This potential change could funnel an estimated ₹5,500 crore into BSE shares from passive funds, while Wipro might see substantial selling pressure from funds that track the index.
BSE Set for Inflow Boost
BSE emerges as the top candidate for inclusion in the Nifty 50, according to Axis Capital. Factors like its free-float market capitalization and recent eligibility trends support this projection. If the exchange joins the index, it could attract around $657 million (approximately ₹5,500 crore) in passive fund inflows, positioning it as the leading recipient among potential new members. BSE's stock has performed strongly, supported by increased derivatives trading, a rise in retail investor participation, and steady growth in its market-linked businesses.
Wipro Faces Net Outflows
Axis Capital identifies Wipro as the most probable stock to be removed from the Nifty 50. An exit could lead to estimated passive outflows of roughly $225 million (about ₹1,880 crore). While Wipro is also expected to join the Nifty Next 50 index, potentially bringing in around $62 million (₹520 crore), this inflow is unlikely to compensate for the selling pressure resulting from its departure from the Nifty 50. The broader IT sector continues to face challenges from reduced client spending and slowing demand.
Nifty Next 50 Churn Expected
Significant changes are also foreseen within the Nifty Next 50 index, according to Axis Capital. Polycab India is highlighted as a prime candidate for inclusion, with potential passive inflows estimated at nearly $55 million (₹460 crore). Hitachi Energy India and Indian Bank are also considered likely entrants, potentially attracting inflows of around $46 million (₹385 crore) and $32 million (₹270 crore), respectively. Potential exits from the Nifty Next 50 include Indian Hotels Company, REC, and Shree Cement, facing estimated outflows of $63 million (₹525 crore), $48 million (₹400 crore), and $37 million (₹310 crore), respectively. Zydus Lifesciences and Lodha Developers Ltd. are also flagged for possible exit, with estimated outflows of $28 million (₹235 crore) and $26 million (₹220 crore).
Bank Nifty Unchanged
Axis Capital does not foresee any alterations to the Bank Nifty's composition in the upcoming review. The current constituents are reported to comfortably meet the eligibility requirements. The Bank Nifty remains a significant focus due to the substantial weighting of financial stocks in major market indices and active trading in its derivatives.