As things stand now, JFSL will now be removed from all the S&P BSE Indices on August 31.
Nifty Indices are also expected to postpone its exclusion. The cumulative selling of both the indices is around 150-160 million shares, Nuvama said.
“Additionally, should JFSL not hit the lower circuit limit on either of the next 2 days, but hits the lower circuit limit on the 3rd day, the removal of JFSL from all the S&P BSE Indices will be postponed,” BSE Indices said.
Ever since they got listed at Rs 265 on BSE last Monday following a demerger from incubator Reliance Industries (RIL), JFSL shares have been under selling pressure as institutional investors have been offloading the stock.
After hitting lower circuits for five sessions, including today, Jio Financial stock was trying to break out of the bear chakravyuh, as it rebounded and rose 3% to the day’s high of Rs 224.80 on BSE. In a volatile trading session, the stock again slipped back into the red zone.
The trading volumes in the stock were significantly higher, with more than 200 million shares changing hands on the National Stock Exchange. This is nearly seven times higher than Thursday’s volume of 28 million shares. Given that Jio Financial cannot be part of the index and will eventually move out, passive funds have been selling it to adjust their index portfolio.
A back-of-the-envelope calculation suggests that roughly 12 crore shares of Jio Financial need to be sold by index funds, and until this is absorbed, the stock is likely to keep hitting lower circuits, dealers said.
Meanwhile, Reliance Industries stock was trading flat at Rs 2,488 on the BSE.