NSE recasts key index

Mumbai, Feb. 22: The National Stock Exchange (NSE) today rejigged its benchmark index to bring in some new scrips, while restructuring its broad market indices.

The semi-annual review of the Nifty 50 index decided to include Aurobindo Pharma, Eicher Motors, Bharti Infratel and Differential Voting Rights (DVRs) of Tata Motors in the index. These securities will replace Cairn India, Punjab National Bank and Vedanta.

A statement from the exchange said that these changes will become effective from April 1.

Because of the inclusion of Tata Motors DVR and three other shares, the Nifty 50 index will have 51 securities. This is for the first time that a DVR is making an entry into a key index.

India Index Services & Products (IISL), a group company of the NSE, also announced a new structure of the Nifty broad market indices. The existing index structure is being enhanced to represent the large, mid and small market capitalisation segments of the domestic capital market.

The new structure comprises 11 indices, of which five are new indices introduced by IISL. The five new indices which have been launched include Nifty Midcap 150, Nifty Smallcap 250, Nifty Full Midcap 100, Nifty Smallcap 50 and Nifty Full Smallcap 100.

"The new structure ensures that a company will be classified into only one of the segments - large, mid and small market capitalisation and provide better reflection of the performance of the respective segments. With the launch of Nifty Smallcap 50 index, IISL will have 50 stock index in each of the three segments. The launch of new indices and the index restructuring will facilitate introduction of investment products," Mukesh Agarwal, CEO of IISL, said.

The exchange also announced revision in the constituents of 17 other indices.

The inclusion of Tata Motors DVR in the Nifty came after securities with DVRs were made eligible for inclusion in an index. This is however, subject to certain elibility criteria. One condition is that the free float of DVR equity class share should be at least 10 per cent of the free-float market capitalization of a company (voting equity class share and DVR equity class share).

National Stock Exchange of India Ltd (NSE)