Nifty Rejig: Shree Cement To Replace Yes Bank In Nifty 50 From March 27
A photograph taken outside the NSE Building in Mumbai. (Source: BloombergQuint)

Nifty Rejig: Shree Cement To Replace Yes Bank In Nifty 50 From March 27

Shree Cement Ltd. will replace private lender Yes Bank Ltd. in the benchmark Nifty 50 Index from March 27.

The lender's stock has tumbled 83.6 percent in the last one year, making it the worst performer on the index. Yes Bank dropped out of the Sensex, too, in December.

The bank delayed its third-quarter earnings to on or before March 14 as it’s in the process of reviewing non-binding expressions of interest from four investors—JC Flowers & Co. LLC, Tilden Park Capital Management, OHA (U.K.) LLP and Silver Point Capital.

Shree Cement has gained 55.7 percent in the last 12 months. The Kolkata-based firm will join UltraTech Cement Ltd. in the Nifty 50, taking the number of the pure-play cement makers in the index to two. To be sure, UltraTech’s holding company Grasim Industries Ltd., owner of 57.2 percent in the cement maker, is also part of Nifty 50 Index.

After the inclusion, Edelweiss Research expects an inflow of nearly $95.6 million into Shree Cement following the rebalancing of index funds; Yes Bank, in comparison, may witness an outflow of $235 million. The cement maker would have an estimated weight of 64 basis points compared with Yes Bank’s 16 basis points, the brokerage said.

The National Stock Exchange of India Ltd. has also revised the criteria for inclusion of companies in its sectoral indices, according to its press release. Companies should now be part of the Nifty 500 index at the time of review against the existing criteria of ranking among the top 800 firms in terms of both average daily turnover and average daily full market value in the previous six months.

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