Why is Jio Financial Services excluded from NSE indices from September 7

Jio Financial Services (JFS) faces exclusion from NSE Indices, including the prestigious Nifty 50, starting September 7, as per the National Stock Exchange’s recent press release. This decision stems from JFS failing to meet the price band criteria on both September 4 and September 5, 2023, at NSE.

If Jio Financial Services manages to hit the price band on September 6, the exclusion will not be postponed any further, the press release noted. This development extends beyond the Nifty 50; the stock will also be removed from Nifty 100, Nifty 200, Nifty 500, Nifty Energy, Nifty India Manufacturing, and 13 other key indices.

It’s important to note that while BSE indices have already removed Jio Financial Services, MSCI and FTSE continue to retain the stock in their indices. As of September 5, the stock closed at Rs 255.30 on the NSE, representing a modest 0.73 percent increase from the previous closing price. The removal from NSE Indices will necessitate passive funds tracking these indices to make necessary adjustments in their portfolios. Nuvama Alternative Research estimates that this passive selling could potentially involve nearly 105 million shares, equivalent to a value of $324 million.

Abhilash Pagaria of Nuvama Alternative & Quantitative Research commented, “With the revised 20 percent price band, the exclusion process should proceed without significant hiccups.”

The adjustment is slated to occur during the final 30 minutes of trading on September 6.