Yes Bank will no longer be a part of the Nifty 50 basket of shares. From March 27, shares in the private sector lender will exit the benchmark index and will be replaced by Shree Cement, a Kolkata-based manufacturer of cement. The reshuffle comes in the backdrop of a periodic review by the National Stock Exchange (NSE), which will also replace few other stocks in its indices from the close of market hours on March 27, according to a statement by the bourse.
Currently, Yes Bank shares are available to investors at the lowest price among the 50 Nifty components, which include Eicher Motors, Nestle India, Bajaj Finance and Maruti Suzuki. It is the only Nifty stock available at a two-digit price for past few months.
Shree Cement will be shifted from the NSE’s Nifty Next 50 basket of shares to the Nifty 50 index.
Last week, the troubled private sector bank delayed its financial results for the October-December period, and said it is in talks with potential investors for a cash infusion.
Yes Bank said it had received non-binding expressions of interest from JC Flowers, Tilden Park Capital Management, OHA (UK) (part of Oak Hill Advisors) and Silver Point Capital for a cash infusion.
Yes Bank shares have slumped more than 85 per cent in the last 10 months. Many groups have downgraded the Yes Bank stock. Credit ratings agency Moody’s last month put Yes Bank under review stating that the lender’s “standalone viability” is “getting increasingly challenged by its slowness in raising new capital”, after lowering them the previous month.
In January, Yes Bank said it had rejected a $1.2 billion investment offer from Canadian investor Erwin Singh Braich and Hong Kong-based SPGP Holdings – an offer about which many analysts expressed doubt.
Besides Shree Cement, the NSE will exclude Ashok Leyland, Indiabulls Housing Finance, L&T Financial Holdings and Vodafone Idea from the Nifty Next 50 index to accommodate Adani Transmission, IDBI Bank, Info Edge, Larsen & Toubro Infotech and Torrent Pharmaceuticals from the same day.
The NSE makes changes in the components of its indices, so as to capture the overall behaviour of equity markets, from time to time.
Just like other stock exchanges, the NSE creates its indices by selecting groups of stocks that are representative of the whole market or a particular sector or segment of the market.
Its Nifty 50 benchmark index contains 50 components – or stocks – accounting for 13 sectors of the economy, including banking, automobiles, consumer goods, metals and pharmaceuticals.