It also believes other new large-cap Internet platform companies like
, with a high free-float market-cap, would be serious contenders for entry into the benchmark index at some later date.
Based on data till July 19, ICICI Securities finds Info Edge to be among the closest contenders to replace IOC in Nifty50 on September 29.
“Info Edge is marginally behind in terms of average free-float market capitalisation criteria at $5 billion; trading 3.7 per cent lower than 1.5 times the smallest free-float market-cap stock within the current Nifty50 pack. It fulfills other conditions such as being part of the F&O pack and the NSE100 universe among others,” ICICI Securities said.
To be sure, the Dow Jones Industrial Average of the US still does not have any of the Internet platform companies such as Amazon or Google as part of its constituents given the limitations of it being a price-weighted index.
Nifty50’s exclusion and inclusion trends, ICICI Securities said, reflect the emerging pockets of demand in the economy over the long term.
In the forthcoming proforma NSE100 universe list, which has been based on the average free-float market-cap since February till now, two other non-Nifty50 stocks that rank ahead of Info Edge are Avenue Supermarts and Adani Green Energy.
But both the stocks are not a part of the F&O pack currently, and thus, may not be included in the index in the September review.
“They are excluded from our likely list, although Avenue Supermarts has the edge in terms of qualifying as an F&O stock. All the three stocks (Info Edge, Adani Green, and Avenue Supermarts) are notably from the new-age economy sectors of internet businesses, organised discount grocery retail with e-commerce incubation, and a green energy company, respectively,” ICICI Securities said.
Also, all these three companies have a 1-year forward P/E ratio of over 100 times, thereby inflating the NSE 100 P/E ratio when compared with the Nifty50