Jio Financial Services (JFS) will be removed from the NSE Indices including the Nifty 50 from September 7, National Stock Exchange said in a press release.
"In accordance with the index methodology, as JIOFIN has not hit price band on two consecutive trading days on September 4, 2023 and September 5, 2023 at NSE, the Index Maintenance Sub-Committee (Equity) has decided to exclude JIOFIN from various indices effective from September 7, 2023 (close of September 6, 2023)," the press release stated on September 5.
If Jio Financial Services hits the price band on September 6, the exclusion shall not be deferred further, it added. Along with Nifty 50, the stock will be excluded from Nifty 100, Nifty 200, Nifty 500, Nifty Energy, Nifty India Manufacturing and 13 other indices.
While BSE indices have already removed Jio Financial Services, MSCI and FTSE continue to include the stock in their indices. On September 5, the stock closed at Rs 255.30 on the NSE, higher by 0.73 percent from previous close.
Passive selling
As the stock is removed from NSE Indices, passive funds replicating them will have to adjust their portfolio. According to Nuvama Alternative Research's calculations, passive selling is anticipated to reach nearly 105 million shares, worth $324 million.
"With the revised 20 percent price band, the exclusion process should proceed without significant hiccups," said Abhilash Pagaria of Nuvama Alternative & Quantitative Research.
The adjustment is scheduled for final 30 minutes of trading on September 6.
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