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Rebalancing of BSE Sensex Indices from 23rd December

02 Dec 2024|
3 min read |
by ICICI Securities Team

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.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.  The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  Investments in securities market are subject to market risks, read all the related documents carefully before investing. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.

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