Zomato Joins Sensex: $513 Million Inflows and 126% Growth (2024)

Zomato's inclusion in the Sensex has captured the attention of market participants as tech-driven companies continue to gain prominence in India's equity landscape. According to estimates by brokerage firm Nuvama, this addition is expected to drive substantial inflows of $513 million into Zomato, marking a significant milestone for the food-tech giant. The stock has witnessed remarkable growth over the past year, with its share price climbing by an impressive 126%, pushing its market capitalization to a substantial ₹2.72 lakh crore. This development underscores the growing influence of technology-centric companies in reshaping the composition of traditional indices.  

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Nuvama’s analysis reveals that Zomato is likely to experience an average volume impact of 2.6 times as a result of its inclusion in the Sensex, reflecting the increased trading activity that typically accompanies such changes. Institutional investors are expected to adjust their portfolios to align with the revised index composition, creating a wave of demand for Zomato shares. The company’s rise to prominence is emblematic of a broader shift in the market’s focus towards innovative businesses that leverage technology to create scalable solutions and capture significant market share.  

Zomato’s entry into the Sensex highlights its evolving status as a key player in India’s corporate ecosystem. Over the years, the company has transitioned from being a startup to becoming a major force in the food delivery and restaurant aggregator industry. Its inclusion in the benchmark index not only cements its position as a market leader but also signals increasing investor confidence in the potential of technology-driven enterprises to deliver long-term value.  

Meanwhile, the Sensex reshuffle has also brought attention to JSW Steel, which is expected to face $252 million in outflows as a result of its exclusion from the index. This development reflects the dynamic nature of the market, where changing trends and sectoral shifts influence investor preferences. For Zomato, the inflows resulting from its inclusion in the Sensex could serve as a catalyst for further growth, providing the company with greater visibility and access to a broader investor base.  

To Summarize

Zomato’s strong performance and rising market capitalization highlight the transformative impact of technology on traditional industries, reinforcing its position as a bellwether for India’s tech ecosystem. As the Sensex evolves to include more technology-driven companies, it mirrors the changing priorities of investors and the broader economic landscape.