The dominance of the Indian Banking, Financial Services and Insurance (BFSI) sector in the Nifty-50 index has increased rapidly. The weight of BFSI in the index was 14.6 percent in FY 2004, while in April 2025 it increased to 37.9 percent. The dominance of the region in the Nifty Index has strengthened due to increasing market capitalization by 50 times in two decades. The market capitalization of BFSI has increased rapidly in 2005 to Rs 91 lakh crore in 2025 compared to just Rs 1.8 lakh crore. Although banks remain the backbone of the sector, their share in total BFSI market capitalization has come down from 85 percent to 57 percent in 2005, the credit goes to non-banking financial companies (NBFCs), Fintech firms and insurance companies inspired by digitization and innovation.
Private banks such as HDFC Bank (weighing from 1.7 per cent to 2025 from 1.7 per cent to 2025 in FY 2004) and ICICI Bank (increased from 4.6 per cent to 9.1 per cent in FY 2018) contribute to the weight. Meanwhile, the participation of PSU banks fell from 6 per cent to 2.8 per cent in FY 2004 and only the 50-share index is left only by State Bank of India (SBI). The FinTech segment where not almost existed a decade ago, is now Rs 12 lakh crore (both listed and non-list).
Despite the HDFC-HDFC bank merger in FY 2020, despite a 4.8 percent decline in the weight from 10.3 percent high levels in 2020, the NBFC is quite strong in the index, the credit goes to Bajaj Finance and Bajaj Finserv. The insurance sector contributes about 1.4 percent to the Nifty. The rise of Asset Management Companies (AMCs) like HDFC AMC is expected to further diversity in the presence of BFSI firms in the Nifty Index. After Kovid, BFSI’s income participation in the Nifty-50 index increased from 16 per cent of FY 2010 to 33 per cent in FY 2024.
First Published – April 22, 2025 | 10:38 pm IST
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