Recently listed shares Zomato, One97 Communications (Paytm), FSN E-Commerce Ventures (Nykaa) are amongst companies that are to be included in the Nifty Next 50 index from 31st March. The modification in standards has made the means for these inventory which obtained listed final year.
The Index Maintenance Sub-Committee – Equity (IMSC) of NSE Indices Limited is determined to make the modifications in eligibility standards of NIFTY fairness indices and alternative of shares in various indices as a part of its evaluation as listed hereunder. These modifications shall become efficient from March 31, 2022, NSE introduced in a round.
The New Methodology
As per the change in methodology, constituents must have a minimal itemizing historical past of one calendar month on the closing date in contrast to three months in the sooner standards.
“Now constituents ought to have a minimal itemizing historical past of 1 calendar month as on the closing date vs earlier requirement of three months. This has paved means for shares like Nykaa ,Paytm, Policy Bazaar and Latent View which obtained listed after 2021. From a passive monitoring perspective, new standards have helped Nykaa and Paytm to get included in Nifty Next 50,” said Abhilash Pagaria, the Head Alternatives analysis at Edelweiss Securities.
Six shares – Nykaa, Indian Oil Corporation (IOC), MindTree Ltd, Paytm, SRF Ltd and Zomato Ltd will replace Apollo Hospitals Enterprise, Aurobindo Pharma HPCL, IGL, Jindal Steel & Power and Yes Bank on the Nifty Next 50 index.
The move has brought some joy to these unsettled tech stocks. The stocks of Zomato, Paytm and Nykaa will continue to be under tremendous selling pressure in the middle of a bloodbath on Dalal Street.
Shares of fintech major Paytm crashed by 5% on 24th February and hit an all-time low of Rs. 780 on BSE. According to latest data, the stock was seen trading 60% lower than its all-time high of Rs. 1,961.05. At the end of intraday trading on Thursday, Paytm’s market cap fell to Rs. 50,798 crore.
Stocks of Indian tech companies fell
Zomato stock fell by nearly 7% during the course of trading on 24th February, settling at Rs. 78. Which is less than half of its bumper debut on the bourse. It had hit an all-time high of Rs. 169.10.
Nykaa’s shares also fell by over 4% on Thursday and came down to Rs. 1,312.95 at the end of intraday trading on the BSE. With this, the market cap of the company fell to Rs. 61,658 crore.
Indian tech stocks saw a sharp decline as Russian President Vladimir Putin declared a war on Ukraine. The situation has worsened by a major correction in the U.S public markets as well as prospects of interest-rate hikes.
The Indian tech stocks are in a bad shape and the current global affairs have not made things any easier for the industry. Despite the small glimmer of hope that arose when Nykaa settled a copyright infringement litigation with the international company L’Oreal, the overall mood has been sad. This situation is going to continue for the next many days however, it remains to be seen whether these stocks will bounce back or not.
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