Tata Motors, Tata Motors with differential voting right, Yes Bank and Vedanta will be dropped from the BSE’s benchmark Sensex from December 23.
In their places, UltraTech Cement, Titan Co Ltd and Nestle India will be added in the index, Asia Index, a joint venture between S&P Dow Jones Indices and the BSE.
Nestle India’s inclusion in the index comes two months after it was added to the country’s other benchmark, the NSE Nifty Index.
That will also bring down the number of constituents to 30 firms in total from 31 previously.
Besides, UPL Ltd and Dabur India will find a place in the S&P BSE Sensex 50, replacing Indiabulls Housing Finance and Yes Bank.
Among other changes, Indiabulls Housing Finance, Yes Bank, InterGlobe Aviation, SBI Life Insurance Company and Info Edge (India) will make entry in the S&P BSE Sensex Next 50, while Cadila Healthcare, Dabur India, Glenmark Pharmaceuticals, UPL Ltd and Edelweiss Financial Services will be dropped from the index.
The changes will be effective from Monday, December 23, 2019.
Apart from these, changes have been made in several indices including S&P BSE 500, S&P BSE 200 and S&P BSE 100.
The moment a periodic reshuffle is carried out in the Sensex, asset management companies alter their portfolio. The AMCs do the investments on behalf of investors in the case of mutual funds. More buying activity is seen in the stock which has been included and exits happen fast in the scrip which has been excluded.
For exchange-traded funds or index funds, the alteration in the portfolio is mandatory as the funds themselves mirror the benchmark BSE Sensex. However, the AMCs have to ensure that buying into the newly included stock is proportionate to its weight in the index, although some deviations may occur.