JM Financial Expects Jio Financial Services, Zomato To Join Nifty If Added To F&O

SUMMARY

If Jio Financial Services and Zomato are not added to futures and options (F&O), the brokerage predicts that Trent and Bharat Electronics could join the Nifty index

Any inclusion of them in the F&O segment would lead to their inclusion in the Nifty: JM Financial

Meanwhile, Nuvama Institutional Equities said in a research note that new-age tech stocks could possibly enter the F&O trading segment following SEBI’s newly proposed eligibility criteria for the derivatives market

Domestic brokerage firm JM Financial expects that Jio Financial Services and Zomato to be included in the Nifty index if added to futures and options.

If Jio Financial Services and Zomato are not added to futures and options (F&O), the brokerage predicts that Trent and Bharat Electronics could join the Nifty index, while LTI Mindtree and Divis Laboratories might be excluded.

“It is interesting to note that JIOFIN and ZOMATO have an average free float market cap higher than TRENT and BHE. However, they are not likely to be included in the Nifty as they are not a part of the F&O segment,” the report said.

“Any inclusion of them in the F&O segment would lead to their inclusion in the Nifty,” it added.

Under such scenario, Trent Ltd is also anticipated to be included in the Nifty, according to the brokerage.

NSE Indices rebalancing announcement is scheduled in the month of August, effective from September 30. For the September rebalancing, the index provider assumes an average free float market cap between the period February 1 to July 31.

Meanwhile, Nuvama Institutional Equities said in a research note that new-age tech stocks Zomato, Paytm, PB Fintech, Nykaa and Delhivery could possibly enter the futures and options trading segment, following the markets regulator Securities and Exchange Board of India’s (SEBI’s) newly proposed eligibility criteria for the derivatives market.

Recently, the SEBI published a consultation paper elaborating the need to review the eligibility criteria of stock derivatives in line with the current market growth. In the paper, it noted that derivative markets enhance price discovery and market liquidity.

For the uninitiated, derivatives are financial agreements between two parties, with their worth tied to underlying assets like stocks and commodities. In the derivatives market, investors engage in trading various instruments such as forward contracts, swap contracts, and futures and options. These contracts are traded both over the counter and through exchanges like the BSE and NSE in India.