 "ETFs, Mutual Funds may drive ₹4,300-crore buying in IndiGo, Max Health")
Come next week, and shares of Hero MotoCorp, IndusInd Bank, and IndiGo (InterGlobe Aviation) will see a massive churn in investor holding with individual shares seeing passive inflows of up to ₹4,300 crore, according to Elara Capital.
This is because the Nifty50 index rebalancing will come into effect from September 30, 2025, forcing mutual funds (MFs) and exchange traded funds (ETFs) managers to buy and sell their holdings in these shares.
Nifty50 September 2025 rebalancing
As a part of its semi-annual index rebalancing, the National Stock Exchange (NSE), said in August 2025 that IndiGo and Max Healthcare will replace Hero MotoCorp, and IndusInd Bank in the Nifty50 index from the close of the business hours on September 29, 2025.
Typically, an Exchange announces rejig of its key indices by either adding or removing stocks, or changing the weightage of the existing stocks to reflect the broader market trend.
Index rebalancing impact
An addition of a stock to a major index, Nifty in this case, creates a short-term demand for that particular stock, leading to an increase in the stock price.
This happens due to mutual funds and ETFs, tracking these indices, buying the new stock to reflect the changes in the index.
Similarly, removal of a stock from an index leads to a decline in the stock price as MF and ETF managers sell the stock to readjust their portfolios.
Nifty50 September rejig: Impact on stocks, ETFs, MFs
According to a recent report by Elara Capital, fund managers may sell Hero MotoCorp shares worth ₹2,687 crore as a part of their fund rebalancing.
Active funds, it said, are already 'Overweight' (OW) on the stock which may lead to further selling pressure.
Similarly, IndusInd Bank may see selling pressure for shares worth ₹1,913 crore. Active funds are marginally 'Overweight' on this stock as well.
IndiGo, which is set to enter Nifty50, will see fund managers buying shares worth ₹4,347 crore.
"Large buying is expected by ETFs but active funds are already ‘OW’ on the stock," Elara Capital said.
Lastly, Max Health shares may see passive inflow of ₹3,281 crore, the brokerage estimates. It notes that active funds are ‘Underweight’ on the stock.
"Among the four names, Max Health is the only name where rebalancing will result in big buying while active funds are already running big underweight positioning across AMCs. The stock has also reached its 200-DMA (daily moving average)," Elara Capital noted.
HDFC Bank, ICICI Bank, RIL to see selling pressure
Apart from the four stocks being added or deleted from the Nifty50 index, Elara Capital expects fund managers selling shares of index heavyweight stocks to balance the overall fund weightage.
It predicts HDFC Bank to see passive outflow of ₹391 crore, ICICI Bank ₹265 crore, Reliance Industries ₹252 crore, Infosys ₹145 crore, Bharti Airtel ₹142 crore, LT ₹116 crore, ITC ₹101 crore, SBI ₹90 crore, and Axis Bank ₹89 crore.