How long it might take ? What are the conditions that need to be satisfied for this to happen ?
Which of the newly listed stocks such as Paytm, Nykaa, Zomato, Delhivery, PB Fintech, Adani Wilmar can make it to the indices ?
It is known that Paytm, Nykaa & Zomato have been added to NN50, can it reach Nifty 50 ?
After meeting all the criteria which also includes 6 months of listing history, LIC can certainly become a part of Nifty50. The market cap of the company is quite huge.
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I heard that Govt has sold only 3.5% stake in LIC.
To be included in Nifty 50, the stock has to be liquid.(something to do with market float)
So the chances of getting included in Nifty 50 is very less, comparatively it can be included in the Nifty Next 50 which does not have the free float rule.
This is relaxed to 1 month now by NSE.
Free float of LIC is pretty low and Nifty 50 index is based on free float, so there is negligible chance of LIC making it to Nifty 50 as of now (Unless govt forces NSE to change criteria to suite its need)
Nifty Next 50 is also based on free float market cap. But analysts feel that LICās free float looks sufficient to get it at bottom end of NN50. Assuming everything remains same by next review of index.
If LIC is included, then the MF houses will have to buy it as part of index rebalancing. So there could be a trade opportunity if yes !
I dearly pray then donāt add to nifty index. LIC in nifty 50. No thanks!!. Their economic model of more commision to dealer is terrible. The only reason it exists is because majority of middle class know lic as safe investment cum insurance.
Adding Paytm and pb fintech would make sense. Others such as Zomato, delhivery , nykaa are e-commerce with specific niche not like amazon. Essentially when recession hits or when interest rates are raised. People start spending less. They cut down on buying stuff.
Zomato : food delivery based app. When recession hits people might even go to an extent boiling ration rice and eat it than order as they would save money due to fear. Thatās a main reason for losses
Delhivery :- may or may not survive during recession but if they contracts with other e-commerce that has wide merchandise such as selling any electronic items like mobile phones or computer peripherals it can hold on its own.
Nykaa:- their niche cosmetics is drawback only. During recession when spending is cut , I donāt think there would be anyone sane to get cosmetics than to save money.
Adani Wilmar:- edible oils are essential but somehow the entire Adani empire is built on political one. God knows how long modi will be thereš . When congress went away anil Ambani went under bus in including many of his bussiness.
Overall nifty 50 has done quite best among all indices over world. I donāt think anyone would smart to add new listing now especially at times like this
Nifty 50 (and also Nifty Next 50) is a rule based index and stocks are added when rules are met and removed when they no longer meet it.
Whole idea of passive investing is that you follow the rules and not human biases.
Now saying that, this companies should make it to index but not this companies because āI donāt feel they have good businessā would totally destroy the working of index and passive investing.
I am aware there are criterias but doesnāt SEBI evaluate whether to include it into index or not based on financial health and how it would do to well in economy ? Or is it only while getting listed into exchange Market?
No. SEBI has no role to play in any index related decision.
And again, all decisions are rule based (so much market cap, listing history etc.) and not arbitrary like how will stock perform and how economy is doing.
DMart has been one of the Top 20 companies by market cap if not 15. Why is it not included in Nifty 50 ?
Because market Cap is not the only criteria for inclusion in Nifty 50.
You can read requirement for Nifty 50 on NSE website:
https://niftyindices.com/indices/equity/broad-based-indices/NIFTY-50
One of the requirement for Nifty 50 is that stock should be part of derivative segment, and Dmart for some reason (unknown to me) is not yet included in derivatives segment.
So it will not be able to enter Nifty 50 till the time it is included in F&O, regardless of its market being in top 20 or 15 companies.
You should worry about Adani group of pump and dump companies with 5000 PE getting into Nifty 50.
These companies have already infiltrated Nifty Next 50 and now makes ~15% weightage of NN50. When the house of cards will collapse its gonna hit NN50 hard.
LIC is unlikely to be included in any of the major indices, such as the Nifty50 or BSE Sensex.
According to IIFL, the investible market cap inclusion level for FTSE is $4.31 billion. Considering that LICās market capitalization is anticipated to be lower than this threshold, it appears that this will be challenging to accomplish.
hard question but the answer is simpleā¦NO!!
i believe melting LIC stock , its will took place in nifty next 50