Yes Bank and Union Bank of India Join Bank Nifty from Dec 31: What It Means for the Sector

Market Performance: Stocks React with Up to 3% Gains

The banking pack saw noticeable movement as Yes Bank and Union Bank of India gained up to 3% after the announcement of their inclusion in the Bank Nifty index starting December 31, 2025.
The shift immediately caught the market’s attention, especially with the sector gearing up for a broader reshuffle.

Bank Nifty will now expand from 12 stocks to 14, bringing fresh weightage adjustments and new sector dynamics.

Main News: Bank Nifty Gets Two New Additions

The exchange confirmed that Yes Bank and Union Bank of India will officially enter the Bank Nifty index at the end of December.
This change marks one of the notable index reshuffles for the year, reshaping how weightage is distributed among major banking names.

The revised capping for the top three constituents has now been set at:

• 19%
  
  
• 14%
  
  
• 10%
  
  

This replaces the earlier proposal that allowed up to 20% for the largest stock and a combined cap of 45% for the top three.

The inclusion of these two PSU and private-sector lenders adds more depth to the index and brings additional liquidity shifts across the basket.

Company Details: Flow Adjustments and Sector Shifts

The upcoming changes are set to trigger a series of flow adjustments as part of the index reshuffle.
The inflows and outflows will be rolled out in four monthly tranches, with the process completing by March 2026.

The reference data highlights:

Expected Inflows

• Yes Bank: inflow estimates of $115 million
  
  
• Union Bank of India: inflow estimates of $100 million
  
  

Expected Outflows

• ICICI Bank: outflow of $351 million (1.9x ADV)
  
  
• HDFC Bank: outflow of $331 million (1.5x ADV)
  
  

Additional inflows greater than 2x ADV were seen in other banking names within the index basket.

The reshuffle also impacted trading sentiment across heavyweight financial stocks, with some names declining between 0.8% and 1.3% during the session.

Meanwhile, another major lender slipped 2.5% to ₹865.65, following expectations around potential inclusion.

Summary: Broader Impact on Bank Nifty

The addition of Yes Bank and Union Bank of India marks a significant update for Bank Nifty, especially as the index expands to 14 constituents. With defined weightage caps and scheduled liquidity adjustments through March 2026, the reshuffle brings renewed focus on the movement of funds within the banking sector.

Key Highlights

• Yes Bank & Union Bank shares rose up to 3%
  
  
• Inclusion effective December 31, 2025
  
  
• Bank Nifty expands from 12 to 14 stocks
  
  
• New caps: 19%, 14%, 10% for top constituents
  
  
• Flow adjustments spread across four tranches
  
  
• Inflows estimated: Yes Bank – $115M, Union Bank – $100M
  
  
• Outflows estimated: ICICI Bank – $351M, HDFC Bank – $331M
  
  

The reshuffle sets the stage for a more diversified index and adds a new layer of interest to the evolving story of Yes Bank, Union Bank of India, and the broader Bank Nifty landscape.