Nifty Auto Index Review: This stock set to replace Apollo Tyres in sectoral index from March 28

Nifty Auto Rebalancing Exercise, Auto Index Semi-Annual Review: Stock exchange NSE on Friday announced a number of changes in its indices including the 15-scrip Nifty Auto gauge. With effect from the opening on March 28 (or the closing the previous day), one stock will be changed in the Nifty Auto.

Nifty Auto Semi-Annual Reshuffle | Inclusion & Exclusion | What is being added to and what is being removed from the auto index?

The stock of Tube Investments of India (TIINDIA) will be added to the Nifty Auto, replacing Apollo Tyres (APOLLOTYRE), according to NSE.

What is an index rejig or index reshuffle? Does it impact the market prices of securities?

Also known as index rebalancing, an index reshuffle is a periodic review of a stock market index's components.

This rebalancing process involves the inclusion and/or exclusion of scrips from the index to ensure it continues to be in alignment with its underlying methodology.

Typically, the inclusion of a stock in an index leads to inflows for the stock owing to larger visibility and exposure to institutional players such as banks and mutual funds. On the other hand, the exclusion of a stock from an index may lead to a fall in its price owing to decreased demand.

Does index rebalancing always impact fund flows?

An index rejig does not always lead to more inflows or outflows.

This is because the impact of an index reshuffle on fund flows depends on a combination of one or more factors, such as market sentiment, stock fundamentals and index methodology.

While an index reshuffle can influence fund flows, it is not a guaranteed outcome.

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