NSE modifies the selection criteria for “authorized to trade” stocks for Nifty


The National Stock Exchange (NSE) on Tuesday changed the stock selection criteria for the Nifty indices.

Until recently, only publicly traded companies were considered for inclusion in the index. As part of the revised framework, NSE will also take into account stocks that are not listed on its platform but that are authorized to trade. The stock exchanges make it possible to trade shares listed on competing stock exchanges in the category known as “authorized to trade”.

Currently, there are more than a dozen stocks, including Abbott India, Bayer Cropscience, Multi Commodity Exchange of India (MCX) and Nestlé India, which are not listed on NSE but are traded in the authorized trading segment. The decision to revise the index inclusion criteria could be a precursor to including Nestlé India in the Nifty benchmark. The domestic arm of the Swiss consumer goods major has a market capitalization of Rs 1.15 trillion. Only 24 of the 50 Nifty stocks have a higher market capitalization.

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