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ICICI Securities Report
Upcoming semi-annual changes to the Nifty50 index wherein Adani Enterprises Ltd. is likely to replace Shree Cement Ltd. is dwarfed by the impact of the impending Housing Development Finance Corporation Ltd., and HDFC Bank Ltd.'s merger.
However, the merger-related changes to the index will depend on the date of shareholders’ approval, hence no definite timelines can be indicated at this point in time.
Past example of a corporate restructuring for Grasim Industries Ltd and related index change indicates a time lag of less than one month from the date of shareholders’ approval to announcement of exit from the index.
The HDFC merger will likely result in an unprecedented ~14% of the Nifty50 weight (HDFC plus HDFC Bank) getting replaced by two new incoming stocks with a combined weight of ~1% and the remaining 13% weight getting distributed amongst the existing 48 stocks in the index at that time.
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