Axis Bank, Nalco To Benefit Most From Bharat 22 ETF Scheme Rebalancing
People walk past a branch of Axis Bank Ltd. on Mahatma Gandhi Road in Gangtok, India (Photographer: Prashanth Vishwanathan/Bloomberg)  

Axis Bank, Nalco To Benefit Most From Bharat 22 ETF Scheme Rebalancing

Bharat 22 ETF scheme, an open-ended exchange fund that tracks the S&P BSE Bharat 22 Index, has been rebalanced in accordance with its underlying index. The rebalancing exercise is conducted annually by the index provider—Asia Index Pvt. Ltd., and is effective from April 27.

The rejigged Bharat 22 ETF has a concentrated portfolio of 22 stocks, with its top five holdings accounting for over half of the index’s weight. The stocks are:

  • L&T Ltd.: 15.76 percent.
  • ITC Ltd.: 14.52 percent.
  • NTPC Ltd.: 8.68 percent.
  • State Bank of India: 8.66 percent.
  • Power Grid Corporation: 8.54 percent.

The rebalancing would be adjusted on April 24, Edelweiss Alternate Research said in a report, adding that Axis Bank Ltd., National Aluminium Company Ltd. and BEL Ltd. would benefit the most from the move.

These companies could witness inflows of Rs 129 crore, Rs 47.3 crore and Rs 30.7 crore, respectively, the report said. On the other hand, SBI, GAIL Ltd. and Powergrid Corporation of India Ltd. could witness the maximum outflows, it said.

This move isn’t big and would have a one-day impact on the market which may not be factored in the stock prices, given the scheme’s portfolio was announced on April 21, according to Gurmeet Chadha, chief executive officer and co-founder of Complete Circle Consultants. He said that Axis Bank and Nalco could witness some traction in a thin volume market.

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