India’s markets regulator, SEBI (Securities and Exchange Board of India), has proposed a phased restructuring of major equity indices tied to derivatives to reduce risks of manipulation
SEBI wants indices like Nifty Bank (NSE), Bankex (BSE), and Nifty Financial Services to include at least 14 stocks, ensuring broader representation
No single stock should hold more than 20% weight, and the top three constituents combined should not exceed 45%
For instance, HDFC Bank and ICICI Bank currently dominate Bank Nifty with 29.09% and 26.47% weight respectively—far above the proposed cap
Market participants have shown a preference to restructure existing indices rather than launch new ones, to avoid disruption in derivatives-linked contracts
While BSE indicated it could implement these changes in one go, SEBI is seeking feedback on the plan until September 8, 2025