BFSI consolidates dominance in Nifty 50 index, up 2.6x at 37.9% since 2004

The Indian banking, financial services, and insurance (BFSI) sector has solidified its dominance in the Nifty 50 Index, with its weight surging to 37.9 per cent in April 2025 from 14.6 per cent in FY04.

 

The sector’s dominance in the Nifty index comes on the back of a 50x increase in market capitalisation over two decades, reaching ₹91 trillion in 2025 from just ₹1.8 trillion in 2005, according to a note by Motilal Oswal.

 

While banks remain the sector’s backbone, their share in total BFSI market cap has dipped to 57 per cent from 85 per cent in 2005, thanks to the rise of non-banking financial companies (NBFCs), fintech firms, and insurance players fuelled by digitalisation and innovation.

 

 

Private banks like HDFC Bank (13.3 per cent weight in 2025 from 1.7 per cent in FY04) and ICICI Bank (9.1 per cent from 4.6 per cent in FY18) have been key drivers. Meanwhile, PSU banks’ share has dwindled to 2.8 per cent from 6 per cent in FY04, with only State Bank of India (SBI) remaining in the 50-share index.

 

The fintech segment, virtually non-existent a decade ago, now is valued at ₹12 trillion (both listed and unlisted).

 

NBFCs, despite a decline to 4.8 per cent weight in 2025 from a peak of 10.3 per cent in FY20 due to the HDFC-HDFC Bank merger, have considerable weight in the index, thanks to Bajaj Finance and Bajaj Finserv. The insurance sector contributes about 1.4 per cent to the Nifty. Rise of asset management companies (AMCs), such as HDFC AMC, is expected to further diversify the presence of BFSI firms in the Nifty index.

 

Post-Covid, BFSI earnings share in the Nifty-50 rose to 33 per cent in FY24 from 16 per cent in FY10, driven by improved asset quality and loan growth, though recent NIM compression poses challenges.