Zomato Shares Soars To See Best Session In Over Three Months After BSE Sensex Inclusion

Share price of Zomato Ltd. surged over 7% on Monday after BSE Ltd. added the restaurant aggregator and food delivery company in its benchmark gauge—BSE Sensex—effective Dec. 23.

Zomato will be added to the Sensex, while JSW Steel Ltd. will be removed from the index, the BSE said on Friday, while announcing its periodic rebalancing of constituents. Asia Index Pvt. carries out periodic reconstitution of BSE indices.

Companies are added and removed from the index based on their average six-month float-adjusted market capitalisation. The index serves as both a benchmark and an investable index and comprises 30 large, well-established, and financially sound companies across key sectors.

However, shares of JSW Steel fell over 2% in early trade on the announcement of exclusion from the benchmark index.

Ashok Leyland Ltd., PI Industries Ltd., IDFC First Bank Ltd., Indian Railway Catering and Tourism Corp., UPL Ltd., and APL Apollo Tubes Ltd. have been removed from the BSE 100 index.

They have been replaced by Jio Financial Services Ltd., Suzlon Energy Ltd., Adani Green Energy Ltd., Adani Power Ltd., Samvardhana Motherson International Ltd., and PB Fintech Ltd.

Zomato's stock rose as much as 7.08% during the day to Rs 282.9 apiece on the NSE. It was trading 4.6% higher at Rs 276.4 apiece, compared to a 1.62% advance in the benchmark Nifty 50 as of 09:37 a.m. The stock saw its best session since Aug. 7 this year, taking its market capitalisation to Rs 2.4 lakh crore.

It has risen 142% during the last 12 months and has advanced by 123% on a year-to-date basis. Total traded volume so far in the day stood at 2.3 times its 30-day average. The relative strength index was at 60.

Of the 27 analysts tracking the company, 24 have a 'buy' rating on the stock, and three have a 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 7.3%.