My Analysis of the Nifty Bank Index
As of May 30, 2025
I will always refer to the Nifty Bank Index to be my best indicator of the Indian banking sector. It is calculated to track the performance of the most liquid and greatest sized banking stocks, that includes a concentrated portfolio of 12 companies listed on NSE.
The index construction uses a Periodic Capped Free Float market capitalization technique. This is an important characteristic and this limits the influence of an individual stock and we will not have a situation where giants such as HDFC and ICICI bank control all the motions of the index. As a measure of what people would actually consider to be a performance, I have used the Total Returns Index variant, one that is considerate enough to consider dividend payments.
Key Performance & Fundamental Metrics
Here are the vital statistics that I find most telling. The index shows very strong long-term returns, and its current P/E ratio suggests a reasonable valuation for the sector's growth profile.
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Total Return (1 Year)
Total Return (5 Yr CAGR)
P/E Ratio
P/B Ratio
Dividend Yield
Beta (vs NIFTY 50)
Index Performance Visualized
To truly understand the index's behavior, I've created visualizations of its long-term journey and its current structure. The historical chart demonstrates the banking sector's powerful, albeit cyclical, growth. The constituent chart reveals the index's heavy concentration in private sector banks, with HDFC and ICICI alone making up over half of the index.
Historical Performance (Since 2001)
Top Constituents by Weightage (%)
1-Year Return vs. Other Sectors (%)
Nifty Bank Stocks List 2025
Here is a detailed breakdown of the 12 banks that form the index, complete with their latest market data. This table is interactive; feel free to search for a specific bank or sort any column by clicking its header to gain deeper insights. (price source: fetch from the yfinance)
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Company Name | Symbol | Price (INR) 22 June, 2025 | Market Cap | P/E Ratio | Volume |
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My Notes on the Index Methodology
The rules governing the index are clear and focused on liquidity and size, which is exactly what I look for in a sectoral benchmark.
- Eligibility Pool: Companies must be part of the Nifty 500 and belong to the Banking sector.
- Liquidity Filter: Only companies that are available for trading in the Futures & Options (F&O) segment are eligible. This is a strict and effective liquidity screen.
- Selection: The final 12 companies are selected based on their free-float market capitalization.
- Weightage Capping: A single stock cannot exceed 33% weight, and the top 3 stocks combined cannot exceed 62% at the time of rebalancing.
- Rebalancing: The index is reviewed and adjusted semi-annually to ensure it remains a true reflection of the market.
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