Sensex reshuffle: Zomato gains spotlight, JSW Steel bows out

The BSE Sensex, India's premier stock market index, will undergo a significant reshuffle on December 23, reflecting evolving market dynamics. Food delivery giant Zomato is set to replace JSW Steel in the 30-share benchmark index, signaling a shift toward tech-driven enterprises. This change is expected to bring inflows of $513 million into Zomato, while JSW Steel could see outflows of $252 million as institutional investors adjust their portfolios, according to brokerage Nuvama.

Zomato’s rise to prominence

Zomato’s inclusion underscores the growing influence of technology-focused companies in India. Over the past year, Zomato's stock has soared by 126 percent, driving its market capitalization to Rs 2.72 lakh crore. Analysts attribute this surge to its strong financial performance and dominance in the food delivery space.

JSW Steel’s exit

JSW Steel’s departure reflects the dynamic nature of market composition. Despite delivering a nine percent return over the last year and maintaining a market capitalization of Rs 2.24 lakh crore, the steel giant will now make way for Zomato. The exit is likely to result in a significant average volume impact of 11.8 times as investors rebalance holdings.

Impact on other stocks

Other stocks in the Sensex will also see weight adjustments:

• Mahindra & Mahindra: Expected outflows of $77 million due to a slight weight reduction.
• ITC: Minor outflows of $9 million, reflecting a 0.1x average volume impact.
• Infosys: A modest $16 million outflow as its weight is trimmed slightly.
• Sun Pharma: Minor adjustments leading to $4 million in outflows.

These changes highlight the ongoing evolution of India's stock market, driven by shifting investor preferences and economic trends.

The reshuffle positions Zomato as a key player in the Sensex, reflecting the broader market’s tilt toward innovation and technology. Meanwhile, JSW Steel and other impacted companies remain significant contributors to their respective sectors, underscoring the dynamism of the Indian equity landscape.