NSE Index Shake-Up: ICICI Bank, NTPC to Soak Up Big Inflows; BEL, M&M, Eternal to Take the Hit

Big changes are coming to India’s stock market. Starting today, 27 June 2025, the NSE is rolling out its routine index rejig, both its quarterly update to broader indices like the Nifty 50 and semi-annual changes to strategy-based indices. If you're tracking the Nifty Midcap 150, Nifty Smallcap 250, CPSE Index, or even the momentum-based ones like Nifty 200 Momentum 30, this one’s for you.

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Who’s Getting the Money?

The big winners in this shuffle are ICICI Bank and NTPC. According to Nuvama Alternative & Quantitative Research, both are set to receive serious inflows thanks to shifts in index weightings.

ICICI Bank is leading the pack with a projected $128 million in passive inflows, roughly 77 lakh shares could be scooped up by funds that track these indices. NTPC, the state-run energy player, isn't far behind with around $126 million coming its way. It's getting a double boost from both broad market and strategy indices.

Other Winners:

• Kotak Mahindra Bank – $102 million
• Bajaj Finance – $91 million
• Bajaj Finserv – $76 million

These inflows are the result of both routine rebalancing and targeted shifts in momentum indices. ICICI Bank, NTPC, and Kotak Mahindra Bank are benefiting across the board.

Who’s Losing Out?

On the flip side, several well-known names are seeing their weight cut, leading to automatic sell-offs by passive funds.

Bharat Electronics Ltd (BEL) tops the list of expected outflows, around $85 million could exit the stock. Mahindra & Mahindra (M&M) is also taking a hit, likely seeing $81 million in outflows as it exits several indices.

Other Names Feeling the Heat:

• Eternal, Sun Pharma, and Tech Mahindra – each expected to lose around $69 million.
• ONGC and Coal India – smaller cuts of $21 million and $20 million, tied to changes in free-float calculations.

Bigger Picture

Rebalancing doesn’t just affect individual stocks, it shifts the weight across entire sectors. Expect NTPC, ICICI Bank, and Bharti Airtel to gain ground, while BEL, ONGC, and Coal India could lose some shine.

Momentum indices like the Nifty 200 Momentum 30 are also in for a major revamp: 20 names out, 20 names in. Among the rising stars? ICICI Bank, NTPC, and Kotak Mahindra Bank. Meanwhile, familiar faces like M&M, Tech Mahindra, Sun Pharma, and Eternal are on the way out.

Sector Trends at a Glance

• Financials & Energy: Big winners here. With banks and power companies drawing in fresh capital, momentum is clearly on their side.
• Defence & Auto: Not so lucky. Stocks like BEL and M&M, which were once stable blue-chips, are facing some outflow-induced turbulence.

Also, expect trading volumes to spike, especially in names like Max Financial Services and HDFC Life, which could see outsized moves due to index-related trades.

When Does This Kick In?

The changes are based on data from May 2025 and will become official after the market closes on Friday, June 27. When markets open again on Monday, June 30, you’ll see the new weightings reflected in real time.

Remember, funds that track indices don’t have a choice, they’re forced to buy and sell based on the new index setup. That creates a short window of predictable buying and selling pressure.

How to Play This

• Short-term? Banks and power stocks may keep rallying on the back of this technical buying. On the other hand, defence and auto names could dip further.
• Medium-term? Fundamentals will start to matter again. The short-term boost (or drop) from index changes fades, and strong businesses tend to find their footing.
• Long-term? This shuffle is part of a larger trend. Financial and energy names are growing in importance in India's stock landscape, while older cyclical sectors are losing steam.

Investor Takeaway

These index changes show just how much passive investing shapes market moves today. If you’re already holding banks or power stocks, you’re in a good spot, at least for now. If you own stocks in sectors facing outflows, don’t panic. This could be a chance to buy quality names like BEL or M&M at lower prices, assuming you believe in their long-term stories.

Another quarter, another index rebalance. ICICI Bank and NTPC are riding high on fresh capital, while BEL, M&M, and Eternal face some near-term selling pressure. Whether this is a short blip or the start of a bigger shift? That’s something only time, and earnings, will tell.