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Bombay Stock Exchange (BSE) is set to replace IT major Wipro in the Nifty 50 index, effective September 30.
The why: BSE earned its place in the Nifty 50 because its average market value over the past six months grew to more than 1.5 times that of Wipro, the index's smallest member.
BSE's inclusion comes nearly a decade after it got listed on Dalal Street in February 2017, marking a significant milestone in the exchange's journey.
Market reaction: BSE shares witnessed some profit booking after hitting record highs.
Meanwhile, Wipro will exit the Nifty 50 for the first time since the index was launched, except for a brief period between April and September 2013, when it was temporarily removed following the demerger of its non-IT businesses.
What does it mean: according to Nuvama Alternative & Quantitative Research, BSE's inclusion could attract around $691 million in passive inflows, while Wipro's exclusion may lead to nearly $240 million in outflows.
The Nifty 50 is reviewed twice a year to ensure it reflects India's largest and most actively traded companies. If a company grows significantly in size and meets the eligibility criteria, it can replace a smaller constituent.
The bigger picture: the changes are part of the NSE's semi-annual index reshuffle. As part of the rejig, Vedanta Aluminium, Polycab, Hitachi Energy India and Vodafone Idea will join the Nifty Next 50, replacing Indian Hotels, United Spirits, REC, Shree Cement and Lodha.
