Shriram Finance Surges 4% on Nifty 50 Inclusion; UPL Drops 2% on Exclusion

In early trade on 29-Feb-24, Shriram Finance share price surged by 4% following the company's inclusion in Nifty 50 index. This move came as part of the index's latest rejig with Shriram Finance stepping in to replace UPL Ltd. NSE highlighted Shriram Finance earned its spot in Nifty 50 because it had the highest 6 month average free float market capitalization among eligible companies. This change is slated to take effect from 28 March.

Financial Implications and Performance

According to the analyst Shriram Finance's inclusion in the Nifty 50 is expected to attract approximately $217 million in inflows while UPL may witness outflows amounting to $114 million. This reshuffle comes against the backdrop of Shriram Finance's impressive performance with its shares surging by over 96% in the past year, Conversely UPL has seen its shares decline by around 35% during the same period.

UPL had a tough year and was among the worst performing stocks on the Nifty 50. This was due to the company's growing debt worries and challenges in the agricultural input industry.

Beyond the Nifty 50 reshuffling has occurred across various indices. Adani Power,  Jio Financial Services, Indian Railway Finance Corporation, Power Finance Corporation, and REC Ltd have joined the Nifty Next 50 index. Conversely, Adani Wilmar, Muthoot Finance, Procter & Gamble Hygiene & Health Care, PI Industries and Shriram Finance have been removed from this index.

Other Changes Across Indices

Nifty 500 index has also witnessed notable changes with 34 stocks being added and removed. Among the additions are Honasa Consumer, Jammu & Kashmir Bank, Jio Financial, AstraZeneca Pharma and Chennai Petroleum Corporation, JSW Infrastructure, Nuvama Wealth, Jupiter Wagons and Railtel Corporation. Conversely Shoppers Stop, Brightcom Group, Delta Corp, Go Fashion, Rallis India, Infibeam Avenues, Pfizer, Nazara Technologies, Orient Electric, Rossari Biotech, and others have been excluded.

Similar adjustments have been made in other indices such as Nifty 100, Nifty Midcap 150, Nifty Smallcap 250 and Nifty Midcap Select. Vodafone Idea has secured a place in the Nifty Midcap Select index ranking within the top 5 based on 6-month average full market capitalization. Meanwhile, Lupin, PI Industries and UPL have been included in the Midcap Select index, among others.

Final Words

Recent reshuffling across various indices reflects the dynamic nature of the market and the evolving landscape of the Indian economy. Investors closely monitor these changes as they capitalize on emerging opportunities and navigate potential risks.