This was something that market experts have been expecting for quite a while. Yes, two of the large Reliance group of companies are no longer going to be a part of the BSE Sensex. Read on to find out more.
Who did this?
The BSE Index Committee met a few days ago and were discussing about the various companies that are part of the BSE Sensex (The core 30 companies that form the index number) They meet on a regular basis to determine if the 30 companies that form the Index deserve their place.
Why did they do it?
For more than a year, two of Anil Ambani’s conglomerates, Reliance Infrastructure and Reliance Communications have been underperforming the stock markets. Also, the trading volumes have been quite low for over an year and hence the BSE Index Committee had to take the decision and replace these 2 companies with newer better performing organizations.
Who Replaces Reliance Communications & Reliance Infrastructure?
This was easy for the Index Committee because Coal India and Sun Pharma have been performing very well over the past one year. They have outperformed the broader markets and their trading volumes have been significantly high too. So, they are going to replace Reliance Communications & Reliance Infrastructure.
What is the End Result?
Two of india’s largest companies will no longer be a part of BSE Sensex 30 companies starting August 8th 2011. Another interesting fact is that, none of Anil Ambani’s companies are now part of the BSE 30 index.
What Next?
Though this may come as bad news for Reliance Infra and Reliance Communication, its not the end of the road for them. They are both fundamentally good companies run by an efficient management. So, in all probabilities they will come back to their profit making self and take back their place in the BSE Sensex
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@ Gautam
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ReplyDelete@ Anonymous
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