BSE Sensex Indices to Get Rebalanced from 23 December 2024 Onwards

The Bombay Stock Exchange (BSE) has announced a rebalancing of its key indices, which will take effect on 23 December, 2024. Let us look at the details and see which stocks have a potential impact.

Sensex Rebalancing: When and Why

The Sensex undergoes rebalancing semi-annually in June and December. These adjustments are conducted by Asia Index Private Limited, a joint venture between S&P Dow Jones Indices and the Bombay Stock Exchange (BSE).

But why does Sensex and other major indices do rebalancing? Rebalancing ensures the index reflects the most prominent and liquid stocks in the market based on criteria like market capitalization, trading frequency, and financial performance. Additionally, occasional ad hoc changes can occur in cases of mergers, acquisitions, or delistings. Also, the periodic update keeps the index relevant for benchmarking and helps passive funds, track the index to align their portfolios.

What is going to change in December 2024?

One company will be replaced by another in this cycle of rebalancing. Here is the detail:

Zomato will make its debut in the BSE Sensex, replacing JSW Steel. Zomato's strong performance over the past year, with a 150% jump in its stock price, has been a major factor in this inclusion.
JSW Steel, on the other hand, is expected to see some fund outflows as passive funds and ETFs align with this change.

Changes in Other Indices

Below are details of the changes in the other two other indexes:

BSE 100 Index:

Additions: Jio Financial Services, Suzlon Energy, Adani Green Energy, Adani Power, Samvardhana Motherson International, and PB Fintech.
Exclusions: Ashok Leyland, P.I. Industries, IDFC First Bank, IRCTC, UPL, and APL Apollo Tubes.

BSE Sensex Next 50:

Additions: Adani Green Energy, HDFC Life Insurance, BPCL, LTIMindtree.
Exclusions: Companies like Zomato, Hindustan Aeronautics, and IRCTC

What is the impact on the included/excluded stocks on BSE Indices?

Zomato made big positive news with its entry into one of India’s most prestigious indices. Zomato’s recent profitability improvements and growth in segments like Blinkit have positioned it as a strong candidate. Index rebalancing prompts buying or selling by passive funds and ETFs, which could influence short-term stock movements for both included and excluded companies.

Do keep track of the companies that are going to be included and excluded from the respective indices.