Tata stock can replace HDFC in Nifty after merger with HDFC Bank in 2023

NEW DELHI: Tata Power is among four stocks that can replace mortgage lender HDFC after its merger with HDFC Bank in 2023. A preliminary analysis by Nuvama Wealth Management shows that
Pidilite, LTI Mindtree, Ambuja Cement and Tata Power are among the candidates to replace HDFC.

"It is quite early to pinpoint a stock that holds the strongest chance to replace HDFC on its merger ex-date. We expect the merger’s completion by Q1FY24," Nuvama said, adding that it doesn't expect any changes for the March 23 review of Nifty constituents.


The cut-off date for rejig in Nifty indices is January 31, while the announcement is expected in February, and the changes come into effect from March 31.

Investors are expecting that after the joint entity of LTIMindtree can replace PSU refinery BPCL in the headline index. "As per our best understanding of the existing methodology, we do not expect LTI

Mindtree (LTIM) to make it to the Nifty50 in the March 2023 review," said Abhilash Pagaria, Head - Alternative & Quantitative Research, Nuvama Wealth Management.

On the other hand, if Avenue Supermarts, Adani Green Energy and Adani Transmission gets included in the F&O segment, it would make it to Nifty50 as the most important criteria for index inclusion is that the stock should compulsorily be part of the derivatives segment.

In Nifty Next 50, also known as Junior Nifty, the list of probable candidates are Adani Power, Varun Beverages, ABB, Page Industries, Adani Wilmar, Trent and TVS Motors, the report said.

On the other hand, Biocon, Gland Pharma, Mphasis and Bandhan Bank could be pushed out. Nuvama expects NSE to maintain the status quo in both Nifty Bank and the Nifty IT index.

In the September reshuffle, NSE included Adani Enterprises in Nifty by replacing Shree Cement.