LTI Mindtree unlikely to replace BPCL in Nifty's next rejig, says Nuvama

LTIMindtree, the merged entity of L&T Infotech Mindtree, is unlikely to replace BPCL in Nifty's next rejig due in March next year, according to Nuvama Alternative Quantitative Research on Tuesday. It sees Adani Power, Varun Beverages, ABB, Page Industries among the stocks that could enter the Nifty Next 50. Nuvama also sees the border line chances of one of the three stocks -- Adani Wilmar or Trent and TVS Motor -- entering the next 50 index.

Nuvama said on LTIMindtree inclusion that this is the most asked questioned, and as per our best understanding of the existing methodology, we do not expect LTI Mindtree LTIM to make it to the Nifty in the March 2023 review.

Nuvama said it was too early to pinpoint a stock that holds the strongest chance of replacing HDFC on its merger ex-date. It expects the merger s completion by Q 1 FY 24 and a number of stocks currently on Nuvama's radar are Pidilite, LTI Mindtree, Ambuja Cement and Tata Power.

The most important criteria for inclusion of the Nifty stock is that it must be part of the derivatives segment.

The average free float market caps of Avenue Supermarts, Adani Green Energy and Adani Transmission are significantly higher than most of the existing Nifty 50 constituents, but the stocks have not been included in the index for the past few reviews because they are not part of the F&O segment.

It said that if any of the above stock gets included in derivatives by the announcement date, it would make it to Nifty 50.

Biocon, Gland Pharma, Mphasis and Bandhan Bank are seen as exclusions from the Nifty Next 50 pack.

On account of proposed voluntary delisting, Adani Power was excluded from all the Nifty Indices in the September rejig. On September 17, Adani Power intimated stock exchanges about the withdrawal of their proposal to voluntarily delist.

The stock is expected to make a comeback to Nifty Indices, it said.

The index provider will announce the list in the second half of February 2023. The m-cap cut-off date would be January 31 and the effective date for the rejig would be March 31.