Nifty FMCG Index Reshuffle: Patanjali Foods, Emami set to replace 2 stocks in sectoral index from March 28

Nifty FMCG Rebalancing Exercise, FMCG Index Review: Stock exchange NSE on Friday announced a number of changes in its indices including the 15-scrip Nifty FMCG. With effect from the opening on March 28 (or the closing the previous day), two stocks will be replaced in the Nifty FMCG.

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

The Emami and Patanjali Foods stocks will be replacing Balrampur Chini and Procter & Gamble Hygiene & Health Care in the FMCG index, 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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