BSE joins Nifty 50; shares slip as much as 3.9% on day one

BSE Limited joined the Nifty 50 on 30 September, replacing Wipro. Axis Capital estimated index funds needed about 15.7 million shares by the 29 September close; the stock fell as much as 3.9 percent, to Rs 3,075, the next day. Inclusion facts: - Announced 10 August; effective 30 September, after the 29 September close - Test: average free-float market cap Rs 1,40,879 crore against Wipro's Rs 55,930 crore, 1.5x required - 29 September close Rs 3,200, up 3.31%; UTI and Nippon India funds bought 52.43 lakh shares at Rs 3,200 - Goldman Sachs and BNP Paribas entities sold 68.33 lakh shares at about Rs 3,200 That demand came once. Q1 FY27 PAT was Rs 873 crore, up 62 percent YoY, but operating profit was flat on Q4 (Rs 1,046 crore against Rs 1,041 crore). Nuvama (6 October, Hold, Rs 3,240 target) sees Q2 adjusted profit at Rs 740 crore, down 13.5 percent QoQ, on the closing auction and calmer volatility. Macquarie (24 September): Outperform, Rs 4,000. BSE [][***** shares closed at Rs 3,244.88 on 9 October on StockGro (NSE Rs 3,287.20, 2.7 percent above the 29 September close). On a Rs 1,34,080 crore market cap that is 38x Q1 profit annualised and 45x Nuvama's Q2 estimate. My view: hold, not a fresh entry. The index demand is spent and at 45x the Q2 run rate there is no margin of safety. SEBI is the swing: reports of 6 October say it may drop the closing auction for derivatives settlement, with a framework due by end-October. Fresh money waits for that and Q2 results, due by 14 November. My exit is a close below Rs 3,075, the 30 September low; resistance is Rs 3,618, the 4 August close. Disclosure: Vijay Kumar Gupta, SEBI Registered Research Analyst, INH000020226, Vijay Gupta Advisory. SEBI registration and NISM certification do not guarantee performance or assure returns. Securities markets are subject to market risks. No holdings in the subject company.