Jio Financial and Zomato Set to Join Nifty50 Under New F&O Rules: Nuvama

The market regulator SEBI has approved changes to the rules for which stocks can enter and exit the derivatives market. Because of these changes, Jio Financial Services and Zomato have a good chance of being added to the Nifty50 index, according to a report by Nuvama Alternative & Quantitative Research Analysis.

Abhilash Pagaria, who leads Nuvama Alternative & Quantitative Research Analysis, mentioned in a recent note that if Jio Financial and Zomato enter the derivatives market before mid-August, they are very likely to be included in the Nifty50 during the September review, along with Trent.

Pagaria also noted that if Jio Financial joins the Nifty50, it could attract $466 million in passive fund investments. Zomato could see $491 million, and Trent could attract $463 million.

The Securities and Exchange Board of India (SEBI) has made important changes to the rules for equity derivatives, which will affect how stocks are chosen for futures and options (F&O).

One major change is that the average daily delivery value for a stock to qualify for the F&O segment has been raised to ₹35 crore from ₹10 crore in the cash market over the past six months. Additionally, the market-wide position limit has been increased to at least ₹1500 crore from ₹500 crore.

SEBI has also introduced a product success framework to prevent market manipulation through illiquid securities. If trading volumes remain low for six months, the derivatives will be discontinued. These changes aim to strengthen the connection between the cash and F&O markets and improve investor protection.

SEBI’s decision to revise the criteria for F&O stock selection addresses concerns about including illiquid stocks. This follows a discussion paper that highlighted the risks of market manipulation and volatility when there isn’t enough depth in the cash market and appropriate position limits.