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- Damani’s DMart And Naukri.com’s Info Edge Are In The Race To Nifty 50, DMart Is Ahead In Market Capitalization, Number 2 Info Edge Is Part Of F&O Segment
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- Average free float market cap of Avenue Supermarts in the last six months is Rs 44,237 crore, while that of Info Edge is Rs 38,903 crore
- Shares of Avenue Supermarts have given a return of 22% so far this year, while the stock of Info Edge is close to Rs 5,300 with a gain of 12%
- The stock coming out of Nifty 50 can be Indian Oil or Coal India, Indian Oil’s free float has been the lowest in the last five months
Radhakrishna Damani’s Avenue Supermarts (Dmart) or Naukri.com’s parent company Info Edge may soon join Nifty-50. Both the stocks have given excellent performance in the last six months. It has given higher returns than even the benchmark index.
DMart has a higher market capitalization than Infoedge, but being not a part of F&O could lead to entry problems. The NSE revises the shares of the benchmark index every six months from January to July according to the average market capitalization of companies and other parameters.
Being part of the F&O segment is eligible to be a part of Nifty 50 Info Edge
ICICI Direct wrote in a recent note, “Given the average free float market cap as of February 1, 2021, it appears that Avenue Supermart may be included in the Nifty-50 provided it enters the F&O segment.”
Info Edge is the second largest company in terms of average market cap and being a part of the F&O segment is eligible to be a part of Nifty-50. Avenue Supermarts has an average free float market cap of Rs 44,237 crore, while Info Edge has a market cap of Rs 38,903 crore in the last six months.
Stock exiting Nifty 50 can be Indian Oil or Coal India
Shares of Avenue Supermarts have given a return of 22% since the beginning of the year. During this period, the stock of Info Edge has come close to Rs 5,300 with a strength of about 12%. The stock coming out of Nifty 50 can be Indian Oil or Coal India.
ICICI Direct wrote in its report, ‘Entry and exit of Nifty 50 is usually effective between April to October. Market players are given four weeks’ notice before the change becomes effective.
IndianOil’s free float has been the lowest in the last five months
According to ICICI Direct, “Indian Oil’s free float has been the lowest in the last five months. It is possible that in the next review this will be shown the way out. IndianOil’s free float market cap in the last six months stood at Rs 25,291 crore while that of Coal India was Rs 29,397 crore.
If the entry and exit of the Nifty are as per the estimates of the brokerage firm, the weightage of the sector will also change. With the entry of Info Edge, the weightage of tech stocks will increase. The number of BFSI and Tech stocks in the index will increase to 17 from October.
Edelweiss Securities also gave estimates of DMart and Infoedge
Earlier, brokerage firm Edelweiss Securities had also speculated that the new member of Nifty 50 could be either DMart or Infoedge. InfoEdge’s entry in the benchmark index will have a weightage of 55 basis points and could lead to an investment of $110 million. Once DMart enters, its weightage will be around 72 basis points, which can create scope for investment of $ 140 million.