Shenoy: Mandatory Index Fund Selling Drove Jio Financial to Lower Listing Circuits

“Geofinancials is a de-merger from Reliance Industries. Reliance Industries is 10% of India's index. Index funds that hold Reliance Industries got free shares of Geofinancials. Geofinancials will not be in the index. So all these index funds have to sell. The index funds own two lakh crores worth of EUM. So it's about 2000 to 3000 crores of Worth of just geofinancials that is out there. What do the index funds do? They can love geofinancials all they want. They can say, boss, this is the biggest company. But I have to follow the index. There is no way to say, I can, I'll keep this share. I won't tell anyone. So once you're transparent and you have that level of disclosure, your only choice is to sell. So, guess what happens? Three days or two days consecutively, the stocks are at a lower circuit.”

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