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nifty 22,570.35

167.95 (0.75%)

25-Apr-2024 | 16:14

sensex 74,339.44

486.50 (0.66%)

25-Apr-2024 | 15:59

MOFSL 2,463.75

110.75 (4.71%)

25-Apr-2024 | 16:05

India Strategy Report Back

Sectoral weights in Nifty: A journey down the memory lane

21-Sep-2017

The weight of Financials has seen a secular rise in the benchmark indices. BFSI now contributes 35.6% (+3.1x in 15 years) of Nifty-50. The share of Private Banks/ NBFC in the index has gone up, led by a) better earnings performance,coupled with capital raising from the markets (this boosted the free float of Financials),b) sub-par earnings growth witnessed in other sections of the market over the last eight years and c) index moving to a free float basis from June 2009.
As more Insurance companies are listed and the relevance of NBFCs goes up(given the wider financialization of savings and broad-basing of financial disintermediation), we expect the weight of BFSI to inch up further.
We note that 15 years back, PSU Banks' weight (4.7%) was higher than Private Banks (4.4%) in the index, with SBI alone contributing 4.4% of Nifty-50. Today,at 24.3%, Private Banks have the highest weight in Nifty-50, while PSU Banks have just 3% weight. HDFC Bank, at 9.8%, is the highest weighted stock today,much higher than 1.8% 15 years back.

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