Shriram Finance to Replace UPL from Nifty; ₹21000 Crore Inflows Possible

Shriram Finance's share price witnessed huge volatility on Wednesday, March 27, during the trading session. Meanwhile, UPL's share price dropped by 2.07% and closed on a negative note. Both stocks are on investors' watchlist because Shriram Finance will replace UPL from the Nifty effective March 28, 2024.

Shriram Finance's entry into the main benchmark index will trigger approximately $260 million in inflows. The stock in the Nifty index is likely to have a weightage of 0.70%. On the other hand, UPL will exit from the Nifty, which may invite outflows.

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Shriram Finance Beats Benchmark Returns

In the last four sessions, Shriram Finance share price gained nearly 4%. Over the last 9 months, Shriram Finance rallied 58% approximately and beat the returns of Nifty. On the other hand UPL fell by 34% in the last one year period and underperformed the benchmark index.

Which Stocks are Biggest Beneficiary?

While rebalancing in the Nifty, other heavyweights that will be in focus are HDFC Bank, Jio Financial Services, and Adani Power. These three stocks are expected to be the biggest beneficiaries of the semi-annual adjustments, which could trigger cumulative inflows of $650 million.

HDFC Bank will become the second biggest beneficiary with $94 million in inflows. The third biggest beneficiary will be JIO Financial Services, which will see inflows of $80 million, followed by Adani Power, which will see inflows of $45 million.

As a part of rebalancing certain stocks are likely to witness outflows as well. The highest outflows are expected to be seen in SBI $103 million, UPL $95 million, ICICI Bank $77 million and ONGC $32 million.

State run PSU, NTPC, NHPC, NLC India will see their weightage go up in Nifty CPSE. According to estimates by Nuvama, the adjustment will trigger a cumulative inflow of $94 million.

The largest share will be contributed by NTPC $71 million followed by NHPC $13 million and NLC India $10 million.

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