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Our Bureau

Mumbai, July 30

Reliance Power shares gained more than the benchmark indices on Wednesday, partly due to the announcement from the National Stock Exchange that the scrip is to be included in the Nifty index.

Reliance Power will be included in the Nifty index in place of Dr Reddy’s Laboratories from September 10, an NSE circular said.

“The Nifty is a widely tracked index by foreign and domestic institutional investors. Additionally, a number of index funds that have the mandate to invest in Nifty stocks may now take exposure to Reliance Power,” said Mr Satish Ramanathan, Head of Equities, Sundaram BNP Paribas Mutual Fund.

Inclusion in the index enhances the respectability of a stock in the eyes of fund managers, Mr Dhirendra Kumar, CEO, Value Research, said. Reliance Power gained 5.84 per cent on Wednesday (on the NSE) when the Sensex and Nifty gained more than 3 per cent each. On the BSE, it gained 5.77 per cent, closing at Rs 163.05.

The Anil Ambani promoted company’s stock has been witnessing a lacklustre performance ever since its debut on the bourses on February 11.

The company was carved out from the parent firm Reliance Energy, now renamed Reliance Infrastructure. Reliance Power’s Rs 11,500-crore IPO in January received an overwhelming response.

However, the stock plunged on listing and had been under pressure for a very long time.

For the benefit of the public shareholders, the promoters diluted 5 per cent stake in the company.

The company parted with 5 per cent of its shareholding, issuing them as bonus shares in May in the ratio of 3 share for every 5 shares held, raising the public shareholding from 10 to 15.22 per cent.

However, the stock continued to fall, touching a low of Rs 116.30 on the BSE on July 2.

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