Synopsis:
Muted market sentiment accompanied news of major index reshuffle prospects, with aviation and healthcare stocks set for inclusion, while banking and auto players risk exclusion. Significant passive flows are expected, reshaping sector representation as NSE’s semi-annual review approaches in September 2025.
On Tuesday, August 5, 2025, Indian equity benchmarks opened on a muted note. The BSE Sensex slipped 320.28 points to 80,675.34, while the NSE Nifty declined 104.50 points to 24,623.65, reflecting cautious investor sentiment.
Nuvama Institutional Equities, a well-known brokerage in India, expects Max Healthcare and InterGlobe Aviation, parent of Indigo, to enter the Nifty 50 index in the upcoming review. Meanwhile, IndusInd Bank and Hero MotoCorp could face exclusion. The brokerage reiterated strong conviction in the healthcare and aviation sectors while highlighting potential index reshuffle risks for banking and auto players.
The stock selection cut-off ended on July 31, with the official announcement expected in late August. Index adjustments will take effect from September 29, 2025, impacting sectoral representation and investor strategies.
Nifty 50 Inflow
Nuvama projects that the likely Nifty 50 inclusion of Indigo and Max Healthcare could attract passive inflows of about $507 million and $423 million, respectively. Conversely, potential exclusions Hero MotoCorp and IndusInd Bank may face outflows of around $251 million and $240 million, reflecting substantial index-driven fund movements.
In the upcoming Nifty Next 50 reshuffle, likely inclusions are Solar Industries, Mankind Pharma, Siemens Energy India, Hindustan Zinc, and Union Bank of India. Potential exits could include InterGlobe Aviation, Swiggy, Dabur India, and ICICI Prudential Life Insurance, signaling notable shifts in sector representation and market positioning.
Despite earlier expectations of BSE Ltd joining the Nifty 50, Nuvama’s Abhilash Pagaria ruled out the possibility, stating it has zero probability of inclusion in the September 2025 review. He emphasized that under the current methodology and thresholds, Asia’s oldest bourse does not meet the required eligibility criteria for entry into the benchmark index.
Also read: Bank stock jumps 6% after appointing Rajiv Anand as its new MD and CEO
Process of Nifty 50 inclusion
The Nifty 50 undergoes a semi-annual reshuffle using six-month data ending January 31 and July 31. The updated index composition takes effect in March and September, ensuring alignment with market performance and trends.
NSE determines Nifty 50 inclusions based on six-month average free-float market capitalization, which measures the value of publicly tradable shares, excluding promoter holdings and restricted shares, ensuring representation of highly liquid and widely traded companies.
Written by Abhishek Singh
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