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    LTIMindtree unlikely to make entry into Nifty50 in March: Nuvama Wealth

    Synopsis

    “We are confident in our understanding of the current methodology and rule out its inclusion in this review,” said Abhilash Pagaria, head - of alternative and quantitative research at Nuvama Wealth, in a report on Monday.According to Nuvama Wealth, until the merger got completed and fresh shares were credited to the shareholders, NSE considered L&T Infotech as an independent entity.

    LTIMindtree unlikely to make entry into Nifty50 in March: Nuvama WealthETMarkets.com
    LTIMindtree, the merged entity that houses conglomerate Larsen & Toubro’s information technology business, is unlikely to be part of the benchmark Nifty50 during the upcoming March index review, Nuvama Wealth reiterated.

    The completion of the merger of Larsen & Toubro Infotech and Mindtree in November sparked speculation of the new entity, India’s fifth largest IT firm by market capitalisation, making its entry into the Nifty50 index.

    Based on the existing methodology and the NSE's recently floated consultation paper on stock inclusion based on mergers and acquisitions, the quantitative research firm said that LTIMindtree has very little scope to find its way into the Nifty50 during the March review.

    “We are confident in our understanding of the current methodology and rule out its inclusion in this review,” said Abhilash Pagaria, head - of alternative and quantitative research at Nuvama Wealth, in a report on Monday.According to Nuvama Wealth, until the merger got completed and fresh shares were credited to the shareholders, NSE considered L&T Infotech as an independent entity.

    Hence, the elementary deduction is that L&T Infotech’s average market cap will be considered with 26% free float, and once fresh shares are credited, the free float considered will be approximately 31-32%.As per Nuvama’s calculation, taking into account existing shares and hypothetically from December 1 till January 31, L&T Infotech’s free-float m-cap is pegged at 32%.

    Even after taking into account the existing shares from November 15-January 31, it increases the total market cap by 30%.L&T Infotech still stands no chance in replacing BPCL (lowest free-float market-cap contender), at least in the March review, believes Nuvama Wealth.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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