Yes Bank and Union Bank to Be Added in Bank Nifty by the End of December 2025

The Nifty Bank index will see the inclusion of two new constituents at the end of this month, with Yes Bank Ltd. and Union Bank of India Ltd. joining the index. The move comes as part of the revised weightage norms introduced by the Securities and Exchange Board of India (SEBI).

Yes Bank and Union Bank to See Major Inflow

The addition of these two lenders is expected to draw a combined passive inflow of around $249 million. Yes Bank is projected to receive $140 million in inflows for more than 550 million shares, while Union Bank may see around $109 million for approximately 63 million shares. These inflows will be phased in over four tranches across the next four months, as noted by Nuvama Alternative & Quantitative Research.

Inflows in Multiple Tranches

The first tranche adjustment is scheduled for December 30, followed by subsequent adjustments on January 26, February 26, and March 26. By the end of this four-step rebalancing, Yes Bank is expected to hold a 3.9% weightage in the Nifty Bank index, while Union Bank will settle at 2.6%.

SEBI’s Updated Weight Norms

On December 1, the National Stock Exchange (NSE) released the final set of guidelines aligned with SEBI’s revised weight concentration norms. Under these rules, indices linked to futures and derivatives, such as the Nifty Bank must lower excessively weight concentrations.

Impact on Major Banks

The updated framework caps the weightage of the top three index constituents at 19%, 14%, and 10%, respectively. As a result, heavyweight constituents HDFC Bank and ICICI Bank will see their weights gradually reduced through the four tranches starting later this month.

Also Read: Bank Nifty Touches 60,000 for the First Time Amid Positive Global and Domestic Cues 

HDFC Bank’s weight is projected to fall from the current 27.5% to 18.9% after the rebalancing. Meanwhile, SBI’s weightage is expected to rise from 9.4% to 10%. Both HDFC Bank and ICICI Bank will experience weightage-related outflows of roughly $330 million each over the four phases. These changes will officially take effect after market close on December 30.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.