India’s top bourse will add the country’s number one airline company and the most valuable hospital chain by market capitalisation to its benchmark index at the end of September.
InterGlobe Aviation Ltd, operator of IndiGo airline and Max Healthcare Institute Ltd will replace IndusInd Bank Ltd and Hero MotoCorp Ltd in the NSE Nifty 50 Index with effect from September 30, according to a statement by the National Stock Exchange of India Ltd on Friday.
The changes, part of a semi-annual review of the gauge, reflects the shifting dynamics in the economy driven by demographics and rising income levels. It will also lend more diversity to an index largely dominated by banks.
India’s burgeoning middle class has taken a fancy to travel in recent years, boosting shares of aviation and hotel companies. Interglobe’s shares have gained over 35 per cent in the past twelve months, compared to a flattish return in the Nifty 50. It also marks the entry of an airline firm in the benchmark after more than 18 years.
Meanwhile, an aging population and a rise in lifestyle diseases have led to higher spends on healthcare, benefiting hospital stocks.
“Addition of the largest airline operator into Nifty reflects the significance of the aviation sector,” Chinmay Ambaselkar, a trader at Karna Stock Broking LLP said. “It also adds scale and sectoral diversity to the index.”
InterGlobe Aviation may see passive inflow of about $507 million following the rebalance, while Max Healthcare could see buying worth $423 million, Nuvama Institutional Equities estimated prior to the announcement.
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