The upcoming March 2026 semi-annual index review of the Nifty 50 is expected to deliver no changes, according to Nuvama Alternative & Quantitative Research. None of the current stocks meet the stringent market-capitalisation and liquidity thresholds required to displace existing constituents, leaving India's flagship index set for status quo. The review will be based on average market capitalisation and liquidity data for six months through 31 January 2026, with official announcements expected in the second half of February and changes taking effect at the end of March.

While the Nifty 50 may remain stable, Nuvama expects pronounced churn across the broader index universe, driven by the scale of recent initial public offerings and the accelerating entry of new-age, platform-led companies into India's public markets. The rebalancing, effective 30 March, could mark an inflection point where freshly listed firms and digital-first businesses begin to exert meaningful influence across mid- and small-cap indices.

Major Entries in Nifty Next 50

Tata Capital and ICICI Prudential Asset Management Co. are positioned to enter the Nifty Next 50 and the broader Nifty 100 basket. The following table shows their recent performance:

Tata Capital's market capitalisation has climbed more than 9.00% since October 2025, supported by steady post-listing performance and positive Street sentiment. ICICI Prudential AMC has delivered an even stronger showing, rallying over 19.00% since its December listing. Analysts attribute the gains to strong investor demand, improving assets under management and healthy earnings visibility.

Within the Nifty Next 50, Nuvama expects potential inclusions to include Tata Capital, ICICI Prudential AMC and Muthoot Finance, along with either HDFC Asset Management Co. or Cummins India depending on movements at the Nifty 50 level.

Index Exits and Pressure Points

For every new entrant, established names must make way. Several companies face potential exclusion due to declining market capitalisation:

Bajaj Housing Finance faces potential exclusion after its market capitalisation declined more than 19.00% over the past year. Street views remain divided, with four brokerages maintaining buy ratings and five recommending a sell. Havells India has also come under pressure following weak Q2FY26 performance, with softer summer-product demand and delayed consumer spending after the GST transition weighing on earnings expectations.

Other stocks likely to exit the Nifty Next 50 include ICICI Lombard General Insurance Co., Naukri, and either JSW Energy or REC, subject to final parent-index adjustments.

Mid-Cap Index Transformation

The churn becomes more visible in the Nifty Midcap 150, where Nuvama expects entry of companies reflecting the rising influence of consumer-tech, fintech and digital platforms:

LG Electronics India's shares have risen more than 20.00% since October, supported by overwhelmingly positive Street sentiment, though its market capitalisation has moderated to about ₹94,169 crore. BillionBrains Garage has seen an even sharper rally, with shares surging over 63.00% in the same period, lifting market capitalisation from ₹80,837 crore to roughly ₹1.10 trillion.

Correspondingly, several established names are expected to exit the Midcap 150, including HDFC AMC, Muthoot Finance, Exide Industries, LIC Housing Finance and Sona BLW Precision Forgings.

Small-Cap Universe Sees Deepest Reshuffle

The transformation is most pronounced in the Nifty Smallcap 250, where potential inclusions reflect India's evolving entrepreneurial economy. Expected entrants include:

• PhysicsWallah
• Piramal Finance
• Exide Industries
• Honeywell Automation India
• Ajanta Pharma

Simultaneously, established names expected to drop out include Laurus Labs, Authum Investment & Infrastructure, Multi Commodity Exchange of India, Kaynes Technology and Radico Khaitan.

"This reflects a clear wave of new-age companies entering the mid- and small-cap universe," said Abhilash Pagaria, head of Nuvama Alternative & Quantitative Research. He described the upcoming rejig as muted for the Nifty 50 but highlighted "meaningful churn" across broader indices as heavyweight IPOs integrate.

Nuvama cautions that projections remain sensitive to two key risks: any revisions to NSE index methodology and sharp fluctuations in free-float factors, both of which could alter the final composition.

The Indian equity markets started the week on a weak note, with the Nifty 50 declining 0.40% to close at 25,586 on January 19. This marked the first time since October that the index fell below its 100-day exponential moving average (EMA), signaling a potential shift in market sentiment. The broader technical picture suggests increased bearish pressure, with the index now trading below most key moving averages and momentum indicators showing signs of weakness.

Technical Analysis and Key Levels

The Nifty 50's technical structure has deteriorated significantly, with the index slipping below all major moving averages except the 200-day double exponential moving average (DEMA). The index formed a bearish candle with a long lower shadow, indicating selling pressure at higher levels while showing some buying interest at lower levels.

For the Nifty 50, key resistance levels based on pivot points are positioned at 25,638, 25,676, and 25,737. Support levels are identified at 25,517, 25,479, and 25,419. Technical experts suggest that if the index sustains below 25,600, a decline toward 25,450 cannot be ruled out, while the 25,700-25,800 zone may act as resistance.

Bank Nifty Shows Relative Strength

Bank Nifty closed at 59,891, declining 0.34% but demonstrating better resilience compared to the broader market. The banking index traded within the previous day's range and successfully defended both the 20-day EMA and the midline of Bollinger Bands on a closing basis.

Options Data Analysis

The weekly options data for Nifty reveals significant positioning by market participants. Maximum Call open interest was concentrated at the 25,800 strike with 1.61 crore contracts, followed by 26,000 strike (1.59 crore contracts) and 25,900 strike (1.33 crore contracts). The 25,800 level is expected to act as key resistance in the short term.

On the Put side, the 25,500 strike holds maximum open interest with 1.39 crore contracts, potentially serving as crucial support. Maximum Call writing occurred at the 25,600 strike with an addition of 98.07 lakh contracts, while maximum Put writing was observed at the 25,500 strike with 65.39 lakh contracts added.

For Bank Nifty monthly options, the 60,000 strike showed maximum Call OI with 14.63 lakh contracts, indicating potential resistance. The 59,500 strike held maximum Put OI with 15.40 lakh contracts, suggesting strong support at this level.

Market Sentiment Indicators

The Nifty Put-Call ratio increased to 0.77 from 0.76 in the previous session, indicating cautious optimism among traders. A PCR above 0.70 generally reflects bullish sentiment as traders sell more Put options than Call options.

India VIX, the volatility gauge, spiked 4.00% to close at 11.83, climbing above the 20-day, 50-day, and 100-day EMAs while testing the 200-day EMA intraday. This increase in volatility suggests heightened caution among market participants.

Derivative Activity Summary

Market-wide derivative activity showed mixed signals with varying levels of position building and unwinding across different stocks:

• Long Build-up: 26 stocks showed increased open interest with rising prices
• Long Unwinding: 54 stocks experienced declining OI with falling prices
• Short Build-up: 98 stocks saw increased OI with declining prices
• Short Covering: 34 stocks witnessed decreased OI with rising prices

Currently, SAIL and Sammaan Capital remain under the F&O ban, with no new additions or removals from the restricted list. Foreign institutional investors were net sellers worth ₹3,263 crores, while domestic institutional investors provided support with net purchases of ₹4,234 crores on January 19.