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Thursday, October 22, 2009

Changes in Nifty: JP Assoc, IDFC in; Nalco Tata Comm out

veer on Thursday, October 22, 2009 |

The benchmark index, the National Stock Exchange's CNX Nifty 50, has undergone a re-composition that comes into effect from October 22. Nalco and Tata Communication will be excluded from the index and Jaiprakash Associates and IDFC will be added.

Among the new entrants, Nalco has a free-float weight of 0.21 while Tata Communication has free-float weight of 0.22.

Jaiprakash Associates trades with free-float weight of 1.24 and IDFC with free-float weight of 1.4, which will have FFF (free float factor) of 0.49 and 1, respectively.

Trailing 12 months profit (TTM) for Nalco was at Rs 873 crore while Tata Communication’s TTM stood at Rs 448 crore. IDFC reported TTM of Rs 643 crore and JP Associates of Rs 1,144 crore. The Nifty's net profit thus adds about Rs 466 crore, as a result of the change.

Free-float market cap also increases significantly. The market cap of Nalco and Tata Communication stood at Rs 6,179 crore (Rs 2,968 crore + Rs 3,211 crore) while the ones on the way out — IDFC and JP Associates — have Rs 38,691 crore (Rs 20,475 crore + Rs 18,216 crore) in market cap: an increase of Rs 32,512 crore.

Price-to-earning ratio also increases 7% while EPS drops by Rs 0.50.

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