Passive index mutual funds may have to offload about ₹3,800 crore shares of Jio Financial Services (JFS) if it does not figure in Nifty after listing on the exchange.  

The Nifty and Sensex index funds could sell about 150 million shares of JFS, as per Nuvama Alternative & Quantitative Research report.

As communicated by exchanges, JFS will remain in the index at this constant discovered price of ₹262 a share till the listing date is announced by the company.

Pratik Oswal, Head of passive funds, Motilal Oswal Asset Management Company, said the demerged stock should be listed in less than three months given its size and market interest.

The stocks entry into Nifty and Sensex will depend on its market-cap and entry into F&O section after being formally listed, he added.

If the stock does not find place in Nifty and Sensex index, passive funds have to offload the shares in three days, he said.

At ₹262 per share, Nifty 50 index passive trackers could sell about 90 million shares which is equivalent to ₹2,370 crore). Alongside Sensex index trackers could sell 55 million shares worth ₹1,440 crore. This is assuming weightages of less than 1 per cent in Nifty and about one percent in Sensex, at the current free float, said Abhilash Pagaria, Head, Nuvama Alternative and Quantitative Research.

These are mostly ballpark calculations as JFS weightage is bound to change with the price movement of other constituents in the index.

Three days after listing, JFS will be removed from the indices, consequently from index funds and its weightage will be distributed among other stocks. So, JFS share price will see some volatility on that day while few other Nifty 50 stocks will see inflows.

Meanwhile, Reliance Industries weight in Nifty 50 index will now move to about 10.1 per cent against 11 per cent as on July 19. In Sensex, it will move to about 11.8 per cent from 12.8 per cent pre-demerger.

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