Nifty 50 Rebalancing – LTI Mindtree to replace HDFC Ltd

The NSE, on Tuesday, announced the replacement of HDFC Ltd shares on its indices as a result of the merger with HDFC Bank. 

Nifty Rebalancing

Starting from July 13, LTI Mindtree, a subsidiary of engineering giant Larsen & Toubro, will replace Housing Development Finance Corporation Ltd in the Nifty 50 index. This change follows the merger of HDFC with its twin entity and the country’s largest private bank, HDFC Bank Ltd, which took effect on July 1. 

The National Stock Exchange issued a release stating that the Index Maintenance Sub-Committee (Equity) of NSE Indices has decided to replace stocks in various indices due to the amalgamation scheme of HDFC Ltd with HDFC Bank Ltd. These replacements will take effect from July 13. 

Therefore, starting from July 13, 2023, LTI Mindtree will be welcomed into the Nifty 50, which serves as the primary benchmark of the NSE consisting of 50 large-cap stocks, replacing HDFC. This change will also apply to the Nifty50 Equal Weight Index. 

Furthermore, HDFC will be replaced by various other stocks across other indices on the NSE, including the Financial Services, Nifty 200, Nifty 500, and Services Sectors, among others. 

As LTI Mindtree enters the Nifty 50, its position in the Nifty Next 50 will be taken over by Jindal Steel & Power. 

LTI Mindtree has also taken the place of HDFC in the Nifty Services Sector. Furthermore, in the Nifty 100 index, Jindal Steel & Power Ltd, a prominent metal company, will replace HDFC, and this substitution will also be reflected in the Nifty100 Equal Weight index. 

Furthermore, HDFC will be replaced by Mankind Pharma in multiple indices, including Nifty 200, Nifty 500, Nifty Large Midcap 250, and Nifty Total Market. 

There will be a change in the sectoral indices where HDFC is replaced by LIC Housing Finance on both the Nifty Financial Services index and the Nifty Financial Services 25/50 index. Apart from this, HDFC will be replaced by stocks like Poonawalla Fincorp on the Nifty Financial Services Ex-Bank index; Phoenix Mills on the Nifty Housing index; Brigade Enterprises on Nifty Core Housing; and Ambuja Cements on Nifty High Beta 50.

HDFC will also exit the ESG indices such as Nifty100 ESG, Nifty100 Enhanced ESG, and Nifty100 ESG Sector Leaders. 

The board of directors of HDFC Bank, in consultation with the board of directors of HDFC, has fixed July 13, 2023, for determining the shareholders of HDFC Ltd, who would be issued and allotted the shares of HDFC Bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares they hold.

Currently, the shares of LTI Mindtree are trading at Rs 5206 on NSE, around Rs 44 down from the previous day’s closing of Rs 5250. The stock has generated a return of 22% in the last six months. Its 52-week highs and lows are Rs 5430 and Rs 4121, respectively.

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