Yes Bank Ltd. and Union Bank of India will be included in the Nifty Bank index from Dec. 31, NSE Indices Ltd. announced on Monday. The number of constituents in the widely-tracked index will rise from 12 to 14.
The Index Maintenance Sub-Committee (Equity) of the NSE subsidiary has decided to revise the index methodology of the Nifty Bank to make it compliant with the additional eligibility criteria for indices which are traded on Future & Options segment of stock exchanges as prescribed by SEBI, according to a circular.
As per the new methodology, the selection of top 14 bank stocks will be based on six-month average free-float market capitalisation within the eligible stocks that are available for trading in NSE's F&O segment.
The weightage of the top three stocks in Nifty Bank index will be capped at 19%, 14%, and 10%, respectively. For stocks other than top three, individual weights will be lower than those of higher weighted index constituents.
The changes will roll out in four monthly tranches: December 2025, January 2026, February 2026, and March 2026.
Nifty Bank comprises of the most liquid and large Indian banking stocks. It currently has AU Small Finance Bank Ltd., Axis Bank Ltd., Bank of Baroda, Canara Bank, Federal Bank Ltd., HDFC Bank Ltd., ICICI Bank Ltd., IDFC First Bank Ltd., IndusInd Bank Ltd., Kotak Mahindra Bank Ltd., Punjab National Bank and State Bank of India.
Inflows, Outflows
Following the Nifty Bank rejig, analysts at Nuvama Alternative Research expect Yes Bank to draw inflows of around $140 million or Rs 1,200 crore from passive funds. PSU lender Union Bank of India can attract $109 million or Rs 980 crore.
At the same time, ICICI Bank may see an outflow of $348 million, HDFC Bank $322 million, Axis Bank $51 million, and Kotak Mahindra Bank $42 million.
HDFC Bank (27.65%), ICICI Bank (23%) and SBI (9.43%) have the most weightage in Nifty Bank as of November.
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