Tata Steel set to get $ 126 million after inclusion in Sensex
MUMBAI: Tata Steel is expected to receive an aggregate inflow of $ 126 million after the stock’s inclusion in the BSE Sensex after a six-month gap, according to estimates from Abhilash Pagaria, analyst at Edelweiss Alternative Research. As part of a redesign, Tata Steel will be included in the 30-stock index replacing the Oil and Natural Gas Corporation (ONGC) from June 21.
“Tata Steel will see an inflow of approximately $ 126 million and ONGC will see an outflow of $ 60 million,” Pagaria said. Tata Steel was a constituent of Sensex until December, when it was replaced by Dr Reddy.
Tata Steel has been one of the biggest beneficiaries of the strong rally in metal prices in recent months. So far this year, Tata Steel’s stock has gained 73%, adding 8% in May. This follows a 36% jump in 2020. The BSE Metal Index has climbed 60% this year, becoming one of the biggest sector winners. Metals values rallied on the rise in metal prices, leading to strong earnings growth and faster deleveraging.
Analysts believe that a favorable steel cycle and that Europe is in the sweet spot will complete Tata Steel’s twin goals of growth and debt reduction. He reduced the debt by Rs20,000 crore in the March quarter.
The shares of ONGC, on the other hand, saw their prices increase much less. The CGSB gained 4% in May, after advancing 21% in the year so far. In 2020, the stock lost 28%.
Asia Index Private Ltd, which is a joint venture between S&P Dow Jones Indices LLC and BSE Ltd, also made changes to a few other indices. In the BSE Bankex, the RBL Bank will be replaced by the UA Small Finance Bank. In the BSE 100 and Sensex Next 50 indices, AU Small Finance Bank Ltd, Adani Enterprises Ltd and Cholamandalam Investment & Finance Co. Ltd. will be added, replacing Bosch Ltd, LIC Housing Finance Ltd and TVS Motor Co Ltd.
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