Shriram Finance, Nifty's latest entry, to attract $271 million inflows; Jio Financial, Adani Power shares to gain big

Shriram Finance, Nifty’s latest entry, to attract $271 million inflows; Jio Financial, Adani Power shares to gain big

Shriram Finance Ltd is likely to attract Rs 271 million in passive inflows on its inclusion in Nifty50. UPL, which made way for Shriram Finance in the Nifty club, may see $100 million in outflows post its exclusion from the benchmark index, Nuvama estimated.

As per Nuvama, Jio Financial Services Ltd (JFS) may see $89 million passive inflows on its inclusion in Nifty Next 50. Power Finance Corporation (PFC) is seen attracting $48 million inflows, Adani Power $45 million inflows, REC $45 million inflows and IRFC $23 million inflows. PI Industries, Muthoot Finance and Adani Wilmar may see up to $32 million in outflows.

Nuvama noted that the anxiety surrounding the Nifty Semi-Annual Rejig was palpable, especially after witnessing an 8 per cent intraday drop its high-conviction contender – Shriram Finance on February 27, 2024, fueled by strong rumors of it not making it in Nifty 50.

The brokerage said it maintained its outlook, anticipating further traction for Shriram Finance (with potential 10-15 per cent gains) and a single-digit correction for UPL by end of March.

“SHFL has delivered strong earnings for three quarters, affirming the positive impact of the merger and AUM growth of 15 per cent through FY26E, and a credit cost of 2 per cent. Mahrukh (BFSI Lead) reiterates a ‘BUY’ recommendation, designating it as a top pick with target of Rs 2,700. A potential divestment of its housing finance arm could enhance capital and valuation,” the brokerage said.Shriram Finance is expected to experience a net inflow upwards of $200 million, equivalent to a six-day volume impact and 7.1 million shares. UPL will witness an outflow of $100 million, equivalent to a 3.5-day volume impact and 17.5 million shares, Nuvama said.

A total of 34 changes have been made to Nifty500 index. Inox Wind Ltd, Indian Renewable Energy Development Agency Ltd, Honasa Consumer Ltd, Jio Financial Services Ltd,  AstraZenca Pharma India Ltd, Jai Balaji Industries Ltd and Indian Renewable Energy Development Agency Ltd (IREDA) are some of the additions to the Nifty 500 index. Exclusions included Tata Technologies Ltd, Infibeam Avenues Ltd, Relaxo Footwears Ltd, Nazara Technologies Ltd, V-Guard Industries Ltd, Delta Corp Ltd, Vinati Organics Ltd  and TTK Prestige.

Meanwhile, Nuvama itself has been included in several broader Nifty indices, including Nifty 500, Nifty Mid Smallcap 400, and Nifty Smallcap 250.

Watch Live TV in English

Watch Live TV in Hindi