For the first time since January 2017, the Nifty 50 Index is trading at a higher valuation than the MSCI India Index, as the entry of expensive stocks has lifted its forward P/E multiple above the globally tracked benchmark.
According to Bloomberg data, the Nifty is trading at 22.77 times one-year forward earnings, compared with 21.83 times for the MSCI India Index. So far in 2025, the Nifty has gained 3.8%, outpacing the MSCI India Index’s 2.4% rise.
The 2024 reshuffle brought in richly valued stocks. Eternal and Jio Financial replaced BPCL and Britannia in March, while Trent and Bharat Electronics entered the index in September, replacing Divi’s Lab and LTIMindtree.
- Eternal has surged nearly 72% since inclusion, trading at 362x forward earnings.
- Trent has jumped 34% with a P/E of 92x.
- Bharat Electronics has gained 83%, valued at 46x P/E.
- Jio Financial, despite falling 12%, trades at 92x P/E.
In comparison, the outgoing stocks were far cheaper: BPCL at 8x, Britannia at 46x, Divi’s Lab at 60x, and LTIMindtree at 28x forward earnings.
Other new entrants like InterGlobe Aviation (26x P/E) and Max Healthcare (62x P/E) have also contributed to the elevated valuation levels. Analysts believe the inclusion of growth-oriented and digital economy players will keep the Nifty’s premium intact in the near term.
The MSCI India Index, which covers around 158 large-cap and mid-cap stocks, is typically the preferred benchmark for global investors, sovereign funds, and passive ETFs. Traditionally, such broader indices trade at higher valuations than the Nifty due to their mid-cap exposure, but this trend has reversed in 2025.
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Source: Moneycontrol
News Desk
