HDFC Life Insurance hit an all-time high today at Rs.647.50, after opening at Rs.635. It has come off the high and is now trading at Rs.639 levels, with volumes surging over 3 times.
The stock is up as it is going to be included in the Nifty 50, from Friday, 31st July. It replaces Vedanta in the benchmark index.
It will join its other family members already on the Nifty 50 – HDFC and HDFC Bank.
A stock is included in the Nifty 50 after it has fulfilled a few conditions – should have traded at an average impact cost of 0.5% or less in past 6 months for 90% of the observations. It should have at least twice the float adjusted market capitalization of the current smallest index constituent. Market capitalisation, liquidity and trading frequency are other criteria that are considered to include a stock into an index.
The index is re-balanced on semi-annual basis and the ex change gives four weeks before making any changes to the index.