BSE and IndiGo Set to Replace Hero MotoCorp and IndusInd Bank in Nifty50: What Investors Need to Know
BSE and IndiGo: In a major development expected to reshape the Nifty50 index, Hero MotoCorp and IndusInd Bank are likely to be dropped, making way for BSE Limited and InterGlobe Aviation (IndiGo). This potential reshuffle is part of the semi-annual index review conducted by the National Stock Exchange (NSE) and is likely to take effect in September 2025, with an announcement anticipated in August 2025.
Why the Change?
The NSE conducts a comprehensive review of the Nifty50 index twice every year—once using data up to January 31 and again using data up to July 31. Based on these evaluations, changes are announced in February and August, and implemented in March and September respectively.
The review process primarily focuses on:
- Free-float market capitalization (market value of shares actively traded, excluding promoter holdings),
- Liquidity, and
- Average trading volume.
The idea is to ensure that the Nifty50 continues to represent the most liquid and investible large-cap companies in India.
Why Are Hero MotoCorp and IndusInd Bank Being Dropped?
Both Hero MotoCorp and IndusInd Bank have seen their stocks underperform significantly over the past year:
- Hero MotoCorp: Negative returns of over 22% in the past year, indicating weakening investor sentiment toward the auto major.
- IndusInd Bank: Decline of 43%, marred by concerns over governance issues, accounting irregularities, and a troubled derivatives book.
Adding to IndusInd’s woes, it was recently removed from the 30-stock BSE Sensex, a signal of its shrinking significance among large-cap peers. On Monday’s trading session alone, both stocks fell around 2% each, reflecting the market’s ongoing skepticism.
Who’s Coming In?
📈 1. BSE Limited
The Bombay Stock Exchange (BSE) has become a surprise star in the Indian stock market. Despite being listed only on the NSE, it meets all the eligibility criteria for inclusion in the Nifty50 index.
- The stock surged 4% on Monday to close at ₹2,795.
- Over the past year, it has delivered a whopping 235% return, turning into a multibagger.
This phenomenal performance is driven by strong earnings growth, increased retail participation in markets, and its expanding digital and derivative trading platforms.
✈️ 2. InterGlobe Aviation (IndiGo)
India’s largest airline, IndiGo, is soaring high, both literally and figuratively.
- The stock rose by 1.5% on Monday, ending at ₹5,470.5.
- It has delivered a 26% return over the past year.
- The airline has demonstrated resilience post-COVID, expanding fleet capacity and increasing international routes.
The inclusion of IndiGo will strengthen the representation of India’s aviation and travel industry in the benchmark index.
Financial Snapshot of Stocks Involved
| Company | Current Price (₹) | 1-Year Return (%) | P/E Ratio | Market Cap (₹ Cr) | Free-Float Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Hero MotoCorp | ~4,450 | -22% | 18.5 | 89,000 | ~35,600 |
| IndusInd Bank | ~1,330 | -43% | 10.2 | 102,000 | ~40,800 |
| BSE Ltd | ~2,795 | +235% | 46.8 | 38,000 | ~38,000 |
| InterGlobe Aviation | ~5,470.5 | +26% | 23.7 | 105,000 | ~78,800 |
What This Means for Investors
For passive investors, especially those investing in Nifty50 index funds and ETFs, the change will automatically reflect in their portfolios after the official rebalance. For active investors, this change highlights two fast-growing companies that are now being recognized as core components of India’s large-cap universe.
Expert Take
Market experts believe that this rejig reflects the dynamic nature of the Indian economy, where traditional sectors like auto and banking are making space for financial services platforms like BSE and consumer-driven sectors like aviation.
It also shows how governance, performance, and investor trust are critical to a company’s sustained presence in a marquee index like Nifty50.
Conclusion
The likely exit of Hero MotoCorp and IndusInd Bank and the potential entry of BSE and IndiGo highlight an important shift in the Indian equity landscape. As the economy evolves, so does its most tracked stock market index, offering investors a real-time reflection of leadership across industries.
Stay tuned for the official confirmation in August 2025, but the signs are already pointing to a significant reshuffle this September.
📌 Frequently Asked Questions (FAQs)
Q1. Why are Hero MotoCorp and IndusInd Bank being removed from Nifty50?
A: Due to underperformance, governance issues, and low free-float market capitalization. Hero delivered -22% returns, and IndusInd fell by 43% over the past year.
Q2. Which companies are likely to replace them?
A: BSE Limited and InterGlobe Aviation (IndiGo) are expected to be added to Nifty50.
Q3. When will this change happen?
A: The official announcement is expected in August 2025, and changes will take effect from September 2025.
Q4. What makes BSE and IndiGo eligible for Nifty50 inclusion?
A: Strong free-float market cap, high liquidity, and stellar stock performance over the past year—BSE surged by 235%, and IndiGo by 26%.
Q5. Will this impact Nifty50 index funds or ETFs?
A: Yes, passive funds tracking the Nifty50 will rebalance their portfolios accordingly to reflect the new changes.
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