In the quarterly rejig of the NSE Indices, Nifty Bank would witness a larger impact with respect to weightage and fund inflows/outflows, said Edelweiss Alternative Research says on Tuesday. 

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NSE is heading for a reshuffle, in terms of weightage, in Nifty50, Nifty Bank, Nifty CPSE (Central Public Sector Enterprises) and Information & Technology indices. Edelweiss Alternative Research decodes how does this is likely to impact the Indian market.

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The research firm says, “We have analysed the flow impact led by recapping of stocks in key indices (Nifty 50, Nifty Bank and CPSE Index) and inclusion/exclusion in Nifty IT. These are the only Indices in India which are benchmarked by passive funds.”

These changes shall become effective from September 30, 2021, adjustment will take place on September 29, 2021 (Wednesday), the research firm mentioned.

In Nifty Bank, there is recapping in all the constituents, and key Inflow impact will be visible in State Bank of India ($104mn |0.9 day ADV) and Axis Bank ($58.7mn| 0.6 day ADV); the hierarchy is with respect to weightage change per cent, Edelweiss Alternative Research said in a report.

While key outflows impact in the Nifty Bank Index will be seen most in HDFC Bank ($82mn |0.6 day ADV), followed by Federal Bank ($9.1mn| 0.6 day ADV), Bandhan Bank ($10.9mn |0.6day ADV) and IndusInd Bank ($39mn |0.4day ADV). The hierarchy is with respect to weightage change per cent

While, Power Grid ($17.5mn |0.7 day ADV), NHPC ($2.2mn| 0.5 day ADV) and NTPC ($5.3mn |0.3day ADV) would show top inflows in CPSE Index, in while top outflow impact will be seen in ONGC 21.8mn |0.5day ADV). The inflows and outflows are measured on the basis of weightage change.

Similarly, the research firm points out the major weight change led inflow is in HDFC Life ($23mn |0.5day ADV) in Nifty Index. While, in Nifty IT Index there will be one inclusion and exclusion and as per Edelweiss Alternative Research best efforts the flows are- LTTS (Inclusion|$16.5mn| 0.5 day ADV) and OFSS (Exclusion $20mn| 1.8 day ADV).