New Delhi: The Securities and Exchange Board of India (SEBI) has increased the number of constituents in non-benchmark indices, including the NSE’s Bank Nifty, while also imposing weight caps on the largest constituents. This move aims to minimize concentration risk and promote a more balanced representation in the market. The index will now include a minimum of 14 constituents, up from the previous requirement of 12. The maximum weight for the top constituent will be limited to 20 percent, down from 33 percent. Furthermore, the total weight of the top three constituents cannot surpass 45 percent, reduced from 62 percent.
SEBI’s updated regulations will also modify BSE’s Bankex and NSE’s FinNifty indices by recalibrating the weights of individual stocks within them. For Bank Nifty, major players like HDFC Bank, ICICI Bank, and State Bank of India will experience gradual weight reductions implemented in four phases, with the final adjustment scheduled for March 31, 2026. The first change in Bank Nifty is anticipated for December 2025, followed by three more rebalancing actions. The new regulations for derivatives on non-benchmark indices are designed to reduce risk for investors and funds, as stated by the regulator.