Impact of LTIMindtree inclusion in Nifty 50 | HDFC Bank - HDFC Ltd Merger | CA Rachana Ranade

"so in simple words 50 stocks will remain intact there will be a rebalancing and there will be a reconstitution well before we move on what happened the shirt is different it's okay I've come to tell you something really important Focus okay so Saturday and Sunday which ones 15th and 16th of July 2023 I'm going to conduct a live session in Pune but for what for the technical analysis course but that is going to be in Marathi so if you have some friends who would want to learn technical analysis from me right from the basics that is in Marathi in the in many people's mother tongue then don't forget to check out our website www.rachnaranaday.com where the registration will be available and there are limited seats only 25 seats are there so those who want to come and learn from me in a live classroom environment then don't forget to register as early as possible link is there in the description box and print comment now let's come to a very important part and understand as to why LTI my entry was chosen over other stocks for that first things foremost we have to understand as to when is typically Nifty rebalanced it's balanced rebalanced twice in a year number one in March number two in September okay but then you would have imagined that had we waited till September we would have had only 49 stocks in Nifty that would not happen right so what is mentioned that in exceptional circumstances like something like a merger that's happened that happened right now in that case the rebalancing will be done not only on a semi-annual basis but as per the demands right so now we have to understand as to what are the three four conditions based on which a specific stock is chosen and for that what we are going to do we are going to check out a very important booklet I'm going to take you there so this is the NSE indices methodology document for Equity indices very important document and I'm just going to quickly take you to the nifty 50 points so yes you can see it here and what can you see super important right pay attention the India X represents 50 companies selected from the universe of nifty hundred so first things foremost we have to understand that nifty 50 companies will be those which are a part of obviously Nifty hundred companies so that is condition number one how will they be chosen based on free float market capitalization so we have to understand that the free float market cap has to be really good then only it will be qualify in the top nifty 50 companies okay so basically nifty 50 top companies will be those who have the highest free float market capitalization what is third they should be liquid companies having an average impact cost of 0.5 percent or or less for 90 of the observations for a basket size of 10 crores so what is the third important condition that the average import average impact cost has to be minimum has to be less than or equal to 0.5 percent for what ninety percent of the observations are so simple lower the impact cost better it is and the fourth one is that the Constitutions should have derivative contracts available on NSC so how many conditions four conditions I'll quickly recap it for you number one to be a part of nifty 50 it has to be a part of nifty hundred Universe number two free float market capitalization has to be best has to be highest ideally third to be a part of nifty fifty right number three it has to have a low impact cost at number four the constituent should be also available on the derivatives market now important Point here if you don't know about these concepts for example if you don't know what is uh you know nifty 50 free float market cap if you don't know about that then don't worry what am I going to do I'm going to give a separate block so you just have to click on this block section and you will find a separate blog which will be posted today itself on free float market capitalization and if you don't know concept like what is an impact cost what are you doing we have amazing courses where you can learn about a lot of stock market concepts for example in basics of stock market there are so many plus 45 more Concepts which you can learn at your own pace so don't forget to check out the link in the description box and also in the print comment to invest in knowledge well now that you have understood the basics let's come down to a very interesting Excel sheet so that you will also understand how we could have easily derived that LPI binary so for that have a look at this so first what we have done is this is a list of entire Nifty hundred stocks so what we'll have to do from this entire Nifty hundred stocks college first and foremost we'll have to remove what number one will have to remove nifty fifty companies because they are already a part of 50. and number two we'll have to remove those companies which are not in the derivative segment now after we did this we came down to this list of the companies which has way less companies as compared to the previous one and here you can see when we filtered out only derivative yes all these are filtered into this list now what do we have to check the important Point here was that the free float market capitalization is the basis on which the top nifty 50 companies will be sorted right so for that let us sort this free float market capitalization from largest to smallest right and if you check this you can see that LTI Mind Tree clearly has the highest free flowed market capitalization even if you check buy market capitalization not even free float Market calculation which is not so relevant but still you can see that LTI monitor is the highest now what was one more criteria that was about the impact cost if you remember impact cost should have been uh 0.5 percentage or less and that 90 percent observation now the problem is that the impact cost details which were there in the nifty 50 sheet that are not available very easily six months Sky average and all that what we did is we visited NAC India website and there if you check out any script for every single script will understand what is the current impact cost and that is what we have written down manually for each and every stock that you can see in this list so what can you see here LTM entry average the impact cost which was there on the NSA website is 0.03 percent is it less than what was the requirement yes now if you see here Dabber India though has the lowest but if you remember in that what was it point five percent say come on it should be less than that equal to or less than that so does LTI Mind Tree also satisfy this criteria answer is yes so it it is very very easy to understand as to why LTI monetary was chosen to be a part of nifty 50. in the immediate next section of the video we are going to understand a very very important point that if you already have shares of HDFC if you already have a loan from HDFC if you have a fixed deposit in HDFC then what will be the circumstance what will be the impact on you"

"if you are a shareholder of HDFC limited then what so basically as on the record date that is as on 13th July if you have shares in your dmat account of HDFC limited these shares will be taken away from your account and the shares of HDFC bank will be credited to your dmat account now how much time does it typically take for this entire thing to happen typically it takes around 30 to 45 days okay so you'll have to have some patience for that now question is what will be the swap ratio I think everyone might already know about this for every 25 shares of HDFC limited that you have you will those shares will go from your account and you will get 42 shares of what HDFC bank now the question is that if I have 30 shares then what so it is normal mathematics right so for 25 shares if you're going to get 42 then for 30 shares how much normal cross multiplication now if there is some fractional thing that is coming up if it is exactly not divisible then the fractional thing is sorted in the way of settling by cash simple okay fantastic"

"well now let's shift back to LTI monetary from the HDFC discussion reason is very simple because now that we we know that LTI monetary is going to come we have to do the technical analysis why because all the index funds would now have to buy the shares of LTI mine tree to maintain their composition with Nifty 50. so today if you can see today the stock is has seen some selling pressure uh it is up by just 0.71 right now as I shoot the video but if you I just if I just scroll to quickly go to the one month candle you can see that the stock is down from its highs by quite a bit if I were to check the percentage drop from the highs it's almost available at 30 percent below the high that it has seen now going back to the Daily candle we have to understand also that what is the pivot level is it able to sustain about that so here you can see pivot is around 5067 it is currently facing a little bit resistance around the 5359 mark but as I said in close are going to come into this stock and if that be so there are great chances that it may go up higher and higher"

"second question is if you're a depositor with HDFC so for example if you have FD with HDFC limited then what nothing changes you have already entered into uh this FD with HDFC limited until and unless your FDA matures nothing is going to change for you okay"

"number three if you are a borrower from HDFC limited so basically let's say you have taken a home loan from HDFC limited then your loan account will get shifted to HDFC Bank very important is that there may be changes in your interest rate because you know there is something known as interest rate linking because of which the rates may change so I would request that if you have a loan first visit HDFC limited understand what will be the changes in your home loan rate"