With reference to the inclusion of BSE in the Nifty 50 index, consider the following statements: 1. The inclusion is projected to attract $657 million in passive fund flows into BSE. 2. BSE's six-month average free-float market capitalisation reached Rs 1,40,879 crore. 3. The inclusion is projected to cause $225 million outflows from Wipro. Which of the statements given above is/are correct?

BSE Surges into Nifty 50, Set to Attract $657 Million in Fund Flows

GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims· 29 September 2026

Capital markets and index rebalancing: a GS3 study on how index inclusion drives passive fund flows.

Why in news

The National Stock Exchange (NSE) included BSE in the Nifty 50 index following its high free-float market capitalisation, triggering significant projected fund flows.

Background

BSE's six-month average free-float market capitalisation reached Rs 1,40,879 crore, exceeding Wipro's Rs 55,930 crore by at least 1.5 times. The inclusion is projected to attract $657 million in passive fund flows into BSE and cause $225 million outflows from Wipro.

Facts for Prelims

FactBSE free-float market capitalisation: Rs 1,40,879 crore
FactWipro free-float market capitalisation: Rs 55,930 crore
FactProjected passive fund flows into BSE: $657 million
FactProjected outflows from Wipro: $225 million
BodyNSE: National Stock Exchange of India

Prelims practice question

With reference to the inclusion of BSE in the Nifty 50 index, consider the following statements:

The inclusion is projected to attract $657 million in passive fund flows into BSE.
BSE's six-month average free-float market capitalisation reached Rs 1,40,879 crore.
The inclusion is projected to cause $225 million outflows from Wipro.

Which of the statements given above is/are correct?

(a)2 only
(b)3 only
(c)2 and 3 only
(d)1, 2 and 3

Show answer

Answer: (d) 1, 2 and 3 — Statements 1, 2 and 3 are correct.

For Mains

Q. Discuss how the inclusion of large-cap entities in benchmark indices like Nifty 50 influences capital allocation and market liquidity in the Indian equity markets.

Dimensions to cover in your answer

Liquidity dynamics: Impact of passive fund flows on stock price volatility and market depth
Index weightage: Concentration risks arising from high market capitalisation of specific entities
Capital reallocation: Shift in investor preference from individual large-caps to index-heavy constituents

Keywords: Capital Markets · Passive Investment · Market Capitalisation · Liquidity · Index Rebalancing

Read the full news →Report a mistake in this note Source: Economic Times ↗

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