The Securities and Exchange Board of India (SEBI)’s recent revision of eligibility criteria for the futures and options (F&O) segment has sparked excitement among investors and analysts, with Jio Financial Services and Zomato emerging as strong contenders for inclusion in the prestigious Nifty50 index.
What Changed in the F&O Rules?
On Thursday, SEBI announced several key amendments to the rules governing stock entry and exit in the F&O segment. These changes include:
- Increased Median Quarter Sigma Order Size: The minimum order size requirement has been raised to ₹75 lakh on a rolling basis for the last six months.
- Higher Market Wide Position Limit: This limit has been tripled to ₹1,500 crore.
- Higher Average Daily Value: The minimum average daily value for the last six months has been increased to ₹35 crore on a rolling basis.
- Product Success Framework: This framework will be used to evaluate the removal of stocks from the F&O segment.
Why Jio Financial and Zomato Are Likely Candidates
Nuvama Alternative & Quantitative Research Analysis, in a recent note, highlighted the strong possibility of Jio Financial and Zomato meeting the new F&O criteria. They predict that if these companies are included in the F&O segment before the third week of August, they stand a very high chance of joining the Nifty50 index in the September review.
Potential Impact on the Nifty50
Nuvama analysts Abhilash Pagaria and Abhishek Shetye suggest that the inclusion of Jio Financial and Zomato in the Nifty50 could result in the removal of LTI Mindtree, Divi’s Labs, and Eicher Motors. Additionally, they estimate that Jio Financial and Zomato could see inflows of $466 million and $491 million, respectively, if they are added to the index.
Implications for Investors
The potential addition of Jio Financial and Zomato to the Nifty50 is significant news for investors. These companies, representing the financial services and food delivery sectors, respectively, would bring increased diversification to the index. Additionally, the anticipated inflows could boost their stock prices, making them attractive investment options.
Next Steps
While the inclusion of Jio Financial and Zomato in the Nifty50 is not yet confirmed, the revised SEBI F&O rules have certainly opened the door for this possibility. Investors and market watchers will be closely monitoring these companies’ progress in meeting the new criteria and their potential impact on the Nifty50 landscape.
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