Sebi widens Bank Nifty basket

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has expanded the number of constituents and capped the weights of top constituents in non-benchmark indices, such as the NSE’s Bank Nifty. The new norms were implemented to reduce concentration risk and ensure broader, balanced market representation, according to market regulator.

The index will now require a minimum of 14 constituents, an increase from the current 12. The weight of the top constituent will be limited to 20 per cent, reduced from 33 per cent. Additionally, the combined weight of the top three constituents cannot exceed 45 per cent, down from 62 per cent.

SEBI’s new norms will also rejig BSE’s Bankex and NSE’s FinNifty indices by adjusting the weights of individual stocks within these indices.Regarding Bank Nifty, the heavyweights HDFC Bank, ICICI Bank, and State Bank of India will see their weights reduced gradually in four tranches, concluding on March 31, 2026.

The first adjustment in Bank Nifty is set for December 2025, followed by three additional rebalancings.The new norms for derivatives on non-benchmark indices aim to mitigate risk for investors and funds, according to the regulator.