The National Stock Exchange (NSE) has announced that BSE Ltd., India’s oldest stock exchange, will be included in its benchmark Nifty 50 index. This significant change will see IT services giant Wipro Ltd. exit the prestigious index, with the alterations coming into effect from September 30, 2026.
Criteria for Nifty 50 Inclusion
BSE's entry into the Nifty 50 index follows its robust performance, with its six-month average free-float market capitalization reaching Rs 1,40,879 crore. This figure comfortably surpassed the eligibility criteria, which mandates that a new entrant's market capitalization must be at least 1.5 times that of the smallest existing constituent in the eligible universe.
Wipro, whose average free-float market capitalization stood at Rs 55,930 crore, no longer met the index requirements. The Nifty 50 index comprises India’s 50 largest companies, selected based on their average free-float market capitalization over the past six months, alongside specific trading liquidity criteria.
Market Reaction and Other Candidates
Following the announcement, BSE's shares experienced a positive reaction, trading approximately 2% higher in the current session and showing gains of around 20% for the year 2026. Conversely, Wipro’s stock saw a decline of 1.43% on Tuesday, contributing to a 40% fall for the year.
The semi-annual index review also considered other strong contenders for inclusion, such as TVS Motor Company and Divi’s Laboratories, with average free-float market capitalizations of Rs 84,566 crore and Rs 82,930 crore, respectively. However, these companies did not qualify for the Nifty 50. The primary reason was that their market capitalizations fell short of the prescribed 1.5-times threshold when compared to the two smallest Nifty 50 constituents remaining after Wipro’s exclusion: HDFC Life Insurance Company and Tata Consumer Products.
Impact of Index Rebalancing
Index rebalancing is a regular exercise designed to ensure the Nifty 50 accurately reflects the broader market's performance and includes companies that meet specific size and liquidity benchmarks. Changes like these can lead to significant shifts in investment portfolios for funds tracking the index, potentially causing increased volatility for the affected stocks around the effective date.