IndiGo, Max Health to enter Nifty 50. Do you stand to gain?

Summary: IndiGo and Max Healthcare are in the spotlight as they join the Nifty 50 index from September 30, 2025. Does getting into the index make these stocks a winning bet for investors? We crunched 15 years of data on past Nifty inclusions and the results might surprise you.

India’s benchmark index, the Nifty 50, is getting two fresh entrants. InterGlobe Aviation, the parent company of IndiGo, and Max Healthcare are set to join the elite pack, replacing IndusInd Bank and HeroMoto Corp, as part of the NSE's semi-annual rebalancing.

For the companies, the inclusion is a stamp of recognition, acknowledging their size, liquidity and growing relevance in the stock market. For investors, though, the bigger question is whether this milestone automatically translates into superior returns.

The popular assumption is yes. The belief is logical: when a stock enters the Nifty 50, it should rally as index funds and ETFs (exchange-traded funds) tracking the benchmark must accumulate the newcomers, creating buying pressure. In addition, inclusion carries prestige. It signals that the company has moved into the big league, often sparking retail enthusiasm.

But does this belief hold up in practice?

Crunching the numbers

We examined 40 stocks that joined the Nifty 50 over the last 15 years, up to February 2024, to test the theory. The outcome was far less exciting than the narrative.

Of the 40 companies, nearly half delivered positive returns in the six months after their inclusion, while the other half posted declines. The performance was vastly different across the pack. For instance, IDFC (now IDFC First Bank) posted an 8 per cent return in six months after its inclusion in October 2009. Jaiprakash Associates, meanwhile, dipped nearly 6 per cent from the same time of debut.

The symmetry makes one thing clear: inclusion in the Nifty 50 doesn’t translate to higher returns.

Let’s stretch the horizon a little. We found that just 23 of the 40 entrants (around 57 per cent) posted gains after one year from their respective time of inclusion. A small majority, but hardly the reliable winning streak that index hype suggests. At the individual stock level, the performance was once again widely inconsistent. For example, both Ultratech Cement and Lupin entered the Nifty 50 in September 2012. Their one-year return from there was a negative 9 per cent and a sharp gain of 30 per cent, respectively.

And what if you buy stocks of such companies in advance, anticipating the rush of passive inflows? We tested this as well. Here, too, the record was patchy. About 17 of the 40 names still ended up in the red, even if you bought these stocks two months before inclusion and held for six months afterwards.

Short-term bump, long-term fizz

There is, of course, often a short-lived pop. In the days around the announcement or effective date of inclusion, stocks could see inflows from passive funds, which can nudge prices higher. But once that technical demand subsides, prices revert to the slower grind of business fundamentals. That explains why the dream of quick riches from index reshuffles rarely survives contact with reality.

The verdict

IndiGo and Max Healthcare’s entry into the Nifty 50 is a milestone for both companies, underlining their growing heft in aviation and healthcare. Yet, for investors, it should be seen as recognition, not as a trading strategy. Index inclusion may bring a fleeting tailwind, but it is no substitute for fundamentals. Ultimately, businesses with durable growth drivers, competitive strengths and sound valuations, not index reshuffles, are the ones that create lasting wealth.

That’s why index inclusion should not be among the reasons to invest. What really matters is whether these businesses can sustain growth, protect margins and justify their valuations over the long haul.

At Value Research Stock Advisor, we go beyond headlines to identify companies that can stack the odds in your favour. Our recommendations highlight businesses with resilient moats, financial strength and long-term compounding ability, whether in aviation, healthcare or beyond.

If you want to know which stocks are genuinely worth owning today and which ones to steer clear of, become a Stock Advisor member and access our rigorously researched recommendations.

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