Impact of Sensex Reshuffle on Stock Selection

The Sensex Reshuffle occurs every six months, where the top Indian companies are reviewed for inclusion based on specific criteria like Free Float Market Capitalization and liquidity. Companies must have shares available for public trade while ensuring they can maintain stable prices, which affects their chances of being added to or removed from the index. Recent changes highlight that Wipro was replaced by Adani Ports, illustrating that even established firms can be dropped when they don't meet the stringent criteria. As new contenders for the upcoming December reshuffle, Trent shows a strong free float and liquidity compared to Bajaj Finserv, which is facing potential exclusion due to its high promoter holding limiting public trading options.