Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Apollo Hospitals Enterprise / Event-Driven

<ul>
<li>Nearly three-quarters of the way through the review period, we see <a href="https://www.smartkarma.com/entities/apollo-hospitals-enterprise" target="_blank" data-smartkarma-citation="entities:880:1" rel="noopener">Apollo Hospitals (APHS)</a> and <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge (INFOE)</a> replacing <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil (IOCL)</a> and <a href="https://www.smartkarma.com/entities/coal-india-ltd" target="_blank" data-smartkarma-citation="entities:9117:1" rel="noopener">Coal India (COAL)</a> in the NIFTY50.</li>
<li>The inclusion of Apollo Hospitals and deletion of IOC is a high probability event, while the inclusion of Info Edge and deletion of Coal India is a lower probability event.</li>
<li>The impact in terms of ADV to trade on the stocks is quite large and that increases further once we consider the impact in terms of delivery volumes.</li>
</ul>


Nearly three-quarters of the way through the review period, we see Apollo Hospitals (APHS) and Info Edge (INFOE) replacing Indian Oil (IOCL) and Coal India (COAL) in the NIFTY50.
The inclusion of Apollo Hospitals and deletion of IOC is a high probability event, while the inclusion of Info Edge and deletion of Coal India is a lower probability event.
The impact in terms of ADV to trade on the stocks is quite large and that increases further once we consider the impact in terms of delivery volumes.


NIFTY50 Index Rebalance Preview: Apollo Hospitals & Info Edge in the Zone to Replace IOC and COAL

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Our biggest concerns have stemmed from a handful of large-cap China internet names, which have held back the MSCI EM and Hang Seng indexes. We are also getting a breakout above $93.50-93.75 on the US dollar, a concerning risk-off signal. Still, our list of concerns remains short, and our outlook remains neutral yet constructive overall.

Our biggest concerns have stemmed from a handful of large-cap China internet names, which have held back the MSCI EM and Hang Seng indexes. We are also getting a breakout above $93.50-93.75 on the US dollar, a concerning risk-off signal. Still, our list of concerns remains short, and our outlook remains neutral yet constructive overall.

Global Cyclical Value Sectors Improving -- Buying Financials and Energy Names: ING Groep, Many More

The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> is the flagship index of the National Stock Exchange of India (NSE). The index has 50 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 29 September 2021 and the announcement of the changes will be made four weeks prior to the effective date.The review period runs from February to July and we are nearing the last leg of data that will be used to determine the inclusions and exclusions. We currently see no change to the index, though that could change if <a href="https://www.smartkarma.com/entities/adani-green-energy-ltd" target="_blank" data-smartkarma-citation="entities:29012:1" rel="noopener">Adani Green Energy (ADANIGR IN)</a> and/or <a href="https://www.smartkarma.com/entities/dmart" target="_blank" data-smartkarma-citation="entities:23656:1" rel="noopener">Avenue Supermarts Ltd (DMART IN)</a> are included in the Futures &amp; Options (F&amp;O) segment, or if there is a big rally in <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>.20 stocks have been added to the F&amp;O segment so far this year and there is a possibility that <a href="https://www.smartkarma.com/entities/dmart" target="_blank" data-smartkarma-citation="entities:23656:1" rel="noopener">Avenue Supermarts Ltd (DMART IN)</a> and/or <a href="https://www.smartkarma.com/entities/adani-green-energy-ltd" target="_blank" data-smartkarma-citation="entities:29012:1" rel="noopener">Adani Green Energy (ADANIGR IN)</a> are included in the segment in the next month.<a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>'s average free float market cap is 1.41 times the average free float market cap of <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a>. To reach the 1.5 times average free float market cap threshold, <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a> will need to outperform <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a> by 32% on average over the rest of the review period.If <a href="https://www.smartkarma.com/entities/dmart" target="_blank" data-smartkarma-citation="entities:23656:1" rel="noopener">Avenue Supermarts Ltd (DMART IN)</a> or <a href="https://www.smartkarma.com/entities/adani-green-energy-ltd" target="_blank" data-smartkarma-citation="entities:29012:1" rel="noopener">Adani Green Energy (ADANIGR IN)</a> are added to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a>, the impact of passive buying will be high at over 7 days of ADV. The impact on the potential deletions is around 3 days of ADV to sell.

The NIFTY Index (NIFTY INDEX) is the flagship index of the National Stock Exchange of India (NSE). The index has 50 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 29 September 2021 and the announcement of the changes will be made four weeks prior to the effective date.The review period runs from February to July and we are nearing the last leg of data that will be used to determine the inclusions and exclusions. We currently see no change to the index, though that could change if Adani Green Energy (ADANIGR IN) and/or Avenue Supermarts Ltd (DMART IN) are included in the Futures &amp; Options (F&amp;O) segment, or if there is a big rally in Info Edge India (INFOE IN).20 stocks have been added to the F&amp;O segment so far this year and there is a possibility that Avenue Supermarts Ltd (DMART IN) and/or Adani Green Energy (ADANIGR IN) are included in the segment in the next month.Info Edge India (INFOE IN)'s average free float market cap is 1.41 times the average free float market cap of Indian Oil Corp (IOCL IN). To reach the 1.5 times average free float market cap threshold, Info Edge India (INFOE IN) will need to outperform Indian Oil Corp (IOCL IN) by 32% on average over the rest of the review period.If Avenue Supermarts Ltd (DMART IN) or Adani Green Energy (ADANIGR IN) are added to the NIFTY Index (NIFTY INDEX), the impact of passive buying will be high at over 7 days of ADV. The impact on the potential deletions is around 3 days of ADV to sell.

NIFTY50 Index Rebalance Preview: Catalysts for Change

External broker reports(aggregated public sources), Prabhudas Lilladhar

Prabhudas Lilladhar

External broker reports(aggregated public sources)

Equity Bottom-Up

Coal India (COAL) reported Q4FY21 earnings in line with our estimates. Adj. EBITDA fell 16% YoY to Rs81.1bn (PLe:Rs81.4bn) due to 5% fall in realisations well as for us. Increase in linkage prices would get diluted in mitigating the elevated capex and upcoming wage hike effective from 1 st July, 2021. Similarly, E-auction realisations remained subdued despite global prices at multi-year highs. Due to low visibility on earnings and deteriorating quality of...<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

Coal India (COAL) reported Q4FY21 earnings in line with our estimates. Adj. EBITDA fell 16% YoY to Rs81.1bn (PLe:Rs81.4bn) due to 5% fall in realisations well as for us. Increase in linkage prices would get diluted in mitigating the elevated capex and upcoming wage hike effective from 1 st July, 2021. Similarly, E-auction realisations remained subdued despite global prices at multi-year highs. Due to low visibility on earnings and deteriorating quality of...Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q4FY21 Result Update - Performance to remain below par - HOLD

The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> is the flagship index of the National Stock Exchange of India (NSE). The index has 50 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 29 September 2021 and the announcement of the changes will be made four weeks prior to the effective date.More than a third of the way through the review period that runs from February to July, we see one possible change to the index with <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a> replacing <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a>. There could be more changes if some large stocks like <a href="https://www.smartkarma.com/entities/adani-green-energy-ltd" target="_blank" data-smartkarma-citation="entities:29012:1" rel="noopener">Adani Green Energy Ltd (ADANIGR IN)</a> and <a href="https://www.smartkarma.com/entities/dmart" target="_blank" data-smartkarma-citation="entities:23656:1" rel="noopener">Avenue Supermarts Ltd (DMART IN)</a> are included in the Futures &amp; Options (F&amp;O) segment of the market.<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd (VEDL IN)</a> does not make the cut for index inclusion following the 10% reduction in its free float following the open offer.Passive funds benchmarked to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> will need to trade around 3 days of ADV on <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a> and <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a>. Plus there will be flow from active funds and from cash and carry baskets on the index.<a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a> trades at a valuation premium to its regional peers, while <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a> trades at a discount to its domestic peers.The big event to watch for is the potential inclusion of <a href="https://www.smartkarma.com/entities/adani-green-energy-ltd" target="_blank" data-smartkarma-citation="entities:29012:1" rel="noopener">Adani Green Energy Ltd (ADANIGR IN)</a> and <a href="https://www.smartkarma.com/entities/dmart" target="_blank" data-smartkarma-citation="entities:23656:1" rel="noopener">Avenue Supermarts Ltd (DMART IN)</a> in the F&amp;O segment that will open the door for index inclusion.

The NIFTY Index (NIFTY INDEX) is the flagship index of the National Stock Exchange of India (NSE). The index has 50 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 29 September 2021 and the announcement of the changes will be made four weeks prior to the effective date.More than a third of the way through the review period that runs from February to July, we see one possible change to the index with Info Edge India (INFOE IN) replacing Indian Oil Corp (IOCL IN). There could be more changes if some large stocks like Adani Green Energy Ltd (ADANIGR IN) and Avenue Supermarts Ltd (DMART IN) are included in the Futures &amp; Options (F&amp;O) segment of the market.Vedanta Ltd (VEDL IN) does not make the cut for index inclusion following the 10% reduction in its free float following the open offer.Passive funds benchmarked to the NIFTY Index (NIFTY INDEX) will need to trade around 3 days of ADV on Info Edge India (INFOE IN) and Indian Oil Corp (IOCL IN). Plus there will be flow from active funds and from cash and carry baskets on the index.Info Edge India (INFOE IN) trades at a valuation premium to its regional peers, while Indian Oil Corp (IOCL IN) trades at a discount to its domestic peers.The big event to watch for is the potential inclusion of Adani Green Energy Ltd (ADANIGR IN) and Avenue Supermarts Ltd (DMART IN) in the F&amp;O segment that will open the door for index inclusion.

NIFTY50 Index Rebalance Preview: Info Edge Could Replace IOC

India

Coal India Limited produces and markets coal and coal products, as well as provides related consulting services.

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Coal India Ltd (COAL IN)

NIFTY50 Index Rebalance Preview: Apollo Hospitals & Info Edge in the Zone to Replace IOC and COAL

High probability changes are inclusion of Apollo Hospitals & deletion of IOCL, while there is a lower probability of Info Edge being added & COAL...

Brian Freitas

Global Cyclical Value Sectors Improving -- Buying Financials and Energy Names: ING Groep, Many More

Continued rising rates is likely to support value Sectors moving forward (especially Financials and Energy), and it also typically indicates...

Vermilion Research

NIFTY50 Index Rebalance Preview: Catalysts for Change

There are no changes expected to the NIFTY Index at the September rebalance. However, the inclusion of DMART and/or Adani Green in the F&O segment...

Brian Freitas

Q4FY21 Result Update - Performance to remain below par - HOLD

Coal India (COAL) reported Q4FY21 earnings in line with our estimates. Adj. EBITDA fell 16% YoY to Rs81.1bn (PLe:Rs81.4bn) due to 5% fall in...

Prabhudas Lilladhar

NIFTY50 Index Rebalance Preview: Info Edge Could Replace IOC

We see one potential changes to the NIFTY50 index at the September review. Adani Green and Avenue Supermarts could join the index if listed F&O are...

Brian Freitas

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