In a unique market event, the National Stock Exchange’s benchmark index, the Nifty 50, is set to temporarily include 51 stocks instead of its usual 50. This change will occur following the demerger and subsequent listing of Tata Motors’ commercial vehicle (CV) business.

The board of Tata Motors had previously approved a demerger of the company into two separate listed entities. One entity will house the Commercial Vehicles (CV) business and its investments, while the other will consist of the Passenger Vehicles (PV) business, including electric vehicles (EVs) and Jaguar Land Rover (JLR), along with their investments.

According to market regulations for index adjustments, in the case of a demerger where the newly formed entity is not already a part of the Nifty 500, a special pre-open session will be held for the newly listed stock. This new entity will then be temporarily included in the Nifty 50 index.

As a result, following the demerger of Tata Motors, its CV arm will be added to the Nifty 50. This will increase the number of constituent stocks in the index to 51 for a brief period. The newly included stock will then be removed from the index after the end of the third day of its listing.

This temporary inclusion is a standard procedure to ensure market stability and proper price discovery for the newly demerged entity without immediately disrupting the index’s composition. For shareholders, this demerger is expected to unlock value by allowing for a more focused approach and strategy for each distinct business segment.

Read More: Tata Motors CV Arm Listing to Temporarily Raise Nifty 50 Count to 51