The Bombay Stock Exchange (BSE) on Friday said it would exclude two Anil Dhirubhai Ambani Group (ADAG) companies — Reliance Infrastructure and Reliance Communications — from its benchmark Sensex from August 8.
The exchange would replace Reliance Infrastructure with state-run Coal India and Reliance Communications with Sun Pharmaceutical in the 30-stock Sensex, BSE said in a statement.
Reliance Communications had entered Sensex on June 12, 2006, by replacing Tata Power. Reliance Infrastructure, which was earlier known as BSES and Reliance Energy, had come into the list on August 19, 1996, by replacing Ceat Tyres.
The last time Asia’s oldest stock exchange made revision in Sensex was on December 6, 2010, by removing ACC with Bajaj Auto.
“Exclusion from Sensex is sentimentally negative for Reliance Infrastructure and Reliance Communications. These stocks have already suffered a lot. It is difficult to guess how much impact this particular move will have on their prices,” said Devang Mehta, vice-president and head of equity sales at Anand Rathi Financial Services. “The entry of Coal India into Sensex was expected after its stupendous performance post listing,” he added.
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Shares of Reliance Infrastructure have lost 30 per cent of their market value since December 6, 2010, while those of Reliance Communications have seen 29.89 per cent fall during the same period.
In contrast, Coal India, which made its debut on the bourses in November last year, has seen 22.75 per cent increase in its market capitalisation since December 6, 2010, while Sun Pharma’s market capitalisation has gone up 4.90 per cent in the same period. The market capitalisation of Sensex has declined 10.56 per cent since the last index revision.
BSE considers several criteria to select a company’s scrip in Sensex like minimum listing history of three months, regular trading in the scrip, three-month average free-float and full market capitalisation and turnover.
Sensex on Friday dropped 115 points to 17,870, a three-week low, on persistent selling — mainly in IT and oil and gas stocks — as global investors were spooked by worsening Greek debt default. In three days of straight losses, the key index has lost 438.35 points.