Zomato joins Sensex, surpasses HUL, Nestle

Zomato has made a significant leap by becoming the first new-age company to join the prestigious 30-share benchmark Sensex. This milestone, which replaced JSW Steel in the index, highlights the growing influence of the Indian startup ecosystem within the $5.2 trillion listed market.

As of Monday, Zomato’s Sensex weightage stands at 2.77%, securing the 12th spot among the 30 Sensex components. This marks a remarkable achievement, as it surpasses leading consumer brands like Hindustan Unilever, Maruti Suzuki, Asian Paints, and Nestlé.

Zomato’s “promoter-less” structure and recent Rs 8,500-crore Qualified Institutional Placement (QIP) have boosted its public float, a key factor in determining its Sensex weight.

With a market capitalization of Rs 2.64 trillion, Zomato is now the 28th most valuable company in India. The Sensex, a benchmark index followed by passive funds worth over Rs 2 trillion in assets under management (AUM), sees significant tracking from domestic mutual funds, with the SBI Sensex ETF being the largest with an AUM of Rs 1.2 trillion.

This inclusion in the Sensex is expected to further elevate Zomato’s stock value. Analysts predict the company's shares will benefit from upcoming index rebalancing events, such as inclusion in the Nifty200 Momentum 30 Index on December 30, increased weightage in the Nifty Next 50 Index in January, and potential inclusion in the Nifty 50 Index by March. These developments are expected to attract passive funds, potentially purchasing up to 7% of Zomato’s float.

Since its IPO in July 2021, when shares were priced at Rs 76, Zomato’s stock has surged by 3.6 times and currently trades at Rs 274. The company’s entry into the Sensex was facilitated by its inclusion in the Futures and Options (F&O) segment last month, alongside 44 other companies, during the Sensex rebalancing exercise.