On Friday, Nestle India's entry into NSE's benchmark index, Nifty 50, became effective. It will be replacing mortgage lender Indiabulls Housing Finance Ltd in Nifty 50 Equal Weight Index as well.
Shares of Nestle India Ltd, as well as Indiabulls Housing Finance, declined on the change.
Nestle India fell by as much as 2.4 percent to an intraday low Rs 13,600 while Indiabulls Housing Finance was down by over 3 percent to Rs 400.65.
Nestle's entry increases the weight of fast-moving consumer goods (FMCG) sector in Nifty 50 by 94 basis points to 9.2 percent. Private bank sector still has the highest presence in the index at 26 percent, followed by the IT sector (14.9 percent).
The 50-stock index that constitutes companies from various sectors of the economy is reviewed every six months and changes are accordingly made. A four-week notice is given to the markets before making a change.
The decision to make the change was informed on 28 August by the exchange.
The previous shuffle occurred in February when Hindustan Petroleum was replaced by Britannia Industries.
In the previous month, NSE said that stocks which are permitted to trade on its platform but are not listed on the exchange can also be considered for inclusion in the indices.