Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The NIFTY Index Family has a series of broad equity indices that represents large, mid and small market capitalisation segments of the Indian public equity market.</li>
<li>The review of broad market indices will be done on a semi-annual basis and the changes will be implemented at the end of March and September every year.</li>
<li>Below is a look at the names leading the race to become Adds and Deletes for NIFTY 50, NIFTY 100, and NIFTY 500 in September 2022.</li>
</ul>


The NIFTY Index Family has a series of broad equity indices that represents large, mid and small market capitalisation segments of the Indian public equity market.
The review of broad market indices will be done on a semi-annual basis and the changes will be implemented at the end of March and September every year.
Below is a look at the names leading the race to become Adds and Deletes for NIFTY 50, NIFTY 100, and NIFTY 500 in September 2022.


NIFTY Indices: Quiddity Leaderboard for September 2022

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>We are past the halfway mark in the review period for the September rebalance of the NIFTY100 Index. We see five potential changes which should be announced end August.</li>
<li>There is a high probability of <a href="https://www.smartkarma.com/entities/tata-power-co-ltd" target="_blank" data-smartkarma-citation="entities:15618:1" rel="noopener">Tata Power (TPWR IN)</a>, <a href="https://www.smartkarma.com/entities/indian-railway-catering-and-tourism-corporation-limited" target="_blank" data-smartkarma-citation="entities:33951:1" rel="noopener">Indian Railway Catering and Tourism (IRCTC IN)</a>, <a href="https://www.smartkarma.com/entities/bharat-electronics-ltd" target="_blank" data-smartkarma-citation="entities:6636:1" rel="noopener">Bharat Electronics (BHE IN)</a> and <a href="https://www.smartkarma.com/entities/mphasis-ltd" target="_blank" data-smartkarma-citation="entities:7672:1" rel="noopener">Mphasis Ltd (MPHL IN)</a> being added to the index.</li>
<li>High probability deletions are <a href="https://www.smartkarma.com/entities/lupin-ltd" target="_blank" data-smartkarma-citation="entities:17910:1" rel="noopener">Lupin Ltd (LPC IN)</a>, <a href="https://www.smartkarma.com/entities/jubilant-foodworks-ltd" target="_blank" data-smartkarma-citation="entities:986:1" rel="noopener">Jubilant Foodworks (JUBI IN)</a>, <a href="https://www.smartkarma.com/entities/zydus-lifesciences-ltd" target="_blank" data-smartkarma-citation="entities:12914:1" rel="noopener">Zydus Lifesciences Ltd (ZYDUSLIF IN)</a>, <a href="https://www.smartkarma.com/entities/punjab-national-bank" target="_blank" data-smartkarma-citation="entities:542:1" rel="noopener">Punjab National Bank (PNB IN)</a> and <a href="https://www.smartkarma.com/entities/steel-authority-of-india" target="_blank" data-smartkarma-citation="entities:14323:1" rel="noopener">Steel Authority of India (SAIL IN)</a>.</li>
</ul>


We are past the halfway mark in the review period for the September rebalance of the NIFTY100 Index. We see five potential changes which should be announced end August.
There is a high probability of Tata Power (TPWR IN), Indian Railway Catering and Tourism (IRCTC IN), Bharat Electronics (BHE IN) and Mphasis Ltd (MPHL IN) being added to the index.
High probability deletions are Lupin Ltd (LPC IN), Jubilant Foodworks (JUBI IN), Zydus Lifesciences Ltd (ZYDUSLIF IN), Punjab National Bank (PNB IN) and Steel Authority of India (SAIL IN).


NIFTY100 Index Rebalance Preview: Five Potential Changes in September

<ul>
<li>Two-Thirds of the way through the review period, we see 7 stocks migrating from MidCap to LargeCap, 8 stocks from LargeCap to MidCap, and 1 new listing added to LargeCap.</li>
<li>Post listing, <a href="https://www.smartkarma.com/entities/life-insurance-corp-of-india-lic" target="_blank" data-smartkarma-citation="entities:28829:1" rel="noopener">Life Insurance Corp of India (LIC) (1248Z IN)</a> should be added to the LargeCap segment while <a href="https://www.smartkarma.com/entities/delhivery-pvt-ltd" target="_blank" data-smartkarma-citation="entities:33471:1" rel="noopener">Delhivery (1058656D IN)</a> should be added to the MidCap segment.</li>
<li>On average, stocks expected to migrate from Mid Cap to Large Cap have outperformed. Stocks expected to migrate from the Large Cap to Mid Cap segment have performed the worst.</li>
</ul>


Two-Thirds of the way through the review period, we see 7 stocks migrating from MidCap to LargeCap, 8 stocks from LargeCap to MidCap, and 1 new listing added to LargeCap.
Post listing, Life Insurance Corp of India (LIC) (1248Z IN) should be added to the LargeCap segment while Delhivery (1058656D IN) should be added to the MidCap segment.
On average, stocks expected to migrate from Mid Cap to Large Cap have outperformed. Stocks expected to migrate from the Large Cap to Mid Cap segment have performed the worst.


India: Preview of Stock Reclassification for Active Funds

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

External broker reports(aggregated public sources)

A Relationship Beyond Broking

Nirmal Bang, one of the leading stock broking companies in India, caters to retail and institutional clients by offering them a range of financial products and services, including equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS.

Nirmal Bang is drawn from a diversity of professional backgrounds, and blend of experience, skill and dedication is shared with its clients. Nirmal Bang emphasizes adequate, thorough research local and world-wide developments, balancing these with the astute discovery of intrinsic values, synergies and growth. The aim is simply to help the investors to maximize their returns.

Thematic (Sector/Industry)

<ul><li>As of FY20, the Food Services industry in India was valued at Rs4.2tn and grew by 7- 8% over the prior 5 years.</li><li>FY21 was a forgettable year, as the sector was affected by restrictions on operating hours &amp; capacity, which shrunk the industry size by ~76%.</li><li>Around 26% of restaurants in India shut down permanently, with ~33% of the 7.4mn workforce losing their jobs...(continued).</li></ul>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.

As of FY20, the Food Services industry in India was valued at Rs4.2tn and grew by 7- 8% over the prior 5 years.FY21 was a forgettable year, as the sector was affected by restrictions on operating hours &amp; capacity, which shrunk the industry size by ~76%.Around 26% of restaurants in India shut down permanently, with ~33% of the 7.4mn workforce losing their jobs...(continued).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.

Consumer Sector Update: Restructured Food Services Industry Looking at Good Potential Going Ahead

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Aggregate revenue/EBITDA to grow by 8/9%: Our FMCG coverage universe is expected to deliver growth of 8/9% YoY in revenue/EBITDA in Q4FY22 (vs 24/22% in Q4FY21 and 16/12% in Q3FY22)</li><li>Inflationary pressure continued to disrupt demand in both urban and rural India; however, rural volume growth was weaker than urban</li><li>Volume growth has been decelerating even on 2/3 year CAGR (demand pressure, grammage reduction); however, downtrading was not witnessed</li></ul>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.

Aggregate revenue/EBITDA to grow by 8/9%: Our FMCG coverage universe is expected to deliver growth of 8/9% YoY in revenue/EBITDA in Q4FY22 (vs 24/22% in Q4FY21 and 16/12% in Q3FY22)Inflationary pressure continued to disrupt demand in both urban and rural India; however, rural volume growth was weaker than urbanVolume growth has been decelerating even on 2/3 year CAGR (demand pressure, grammage reduction); however, downtrading was not witnessedContent 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.

FMCG & Alco Bev: Rural Demand Struggles; Margin Pressures Continue

India

Jubilant Foodworks Ltd. owns and operates fast food chains. The Company offers donuts, baked goods, coffee, bagels, muffin, fruit milkshakes, smoothies, tea, sandwiches, pizza, and beverages. Jubilant Foodworks serves its products to customers throughout India.

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Jubilant Foodworks (JUBI IN)

NIFTY Indices: Quiddity Leaderboard for September 2022

A look at the names leading the race to become Adds and Deletes for NIFTY 50, NIFTY 100, and NIFTY 500 in September 2022.

Janaghan Jeyakumar, CFA

NIFTY100 Index Rebalance Preview: Five Potential Changes in September

We see five potential changes to the NIFTY100 Index at the September rebalance. Most are high probability changes and there will be over 1.5 days...

Brian Freitas

India: Preview of Stock Reclassification for Active Funds

Two-thirds of the way through the review period, we see quite a few changes to the Large/Mid/Small Cap classification for Indian stocks. The upward...

Brian Freitas

Consumer Sector Update: Restructured Food Services Industry Looking at Good Potential Going Ahead

Consumer Sector Update Expert Meeting Update Restructured Food Services industry looking at good potential going ahead We recently hosted...

Nirmal Bang

FMCG & Alco Bev: Rural Demand Struggles; Margin Pressures Continue

Aggregate revenue/EBITDA to grow by 8/9%: Our FMCG coverage universe is expected to deliver growth of 8/9% YoY in revenue/EBITDA in Q4FY22...

HDFC Securities

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