The move on the downside on Indian Bank comes after the latest heavyweight weightage guidelines issued by the NSE last evening, which would have an impact on indices such as the Nifty Bank. The resultant rejig will lead to Yes Bank and Union Bank likely to enter the index from the end of this month, but Indian Bank's name is not part of that list.

Here's why shares of Indian Bank are declining despite the PSU Bank outperformance

Indian Bank Shares Decline Amid NSE Weightage Guidelines

Shares of Indian Bank Ltd. are trading with losses of over 2% on Tuesday, December 2, bucking the trend on a day when most of its peers, and the PSU Bank index are trading with gains.

Impact of NSE Guidelines

The NSE has issued the latest heavyweight weightage guidelines, which would have an impact on indices such as the Nifty Bank.
The resultant rejig will lead to Yes Bank and Union Bank likely to enter the index from the end of this month, but Indian Bank's name is not part of that list.

Recent Developments

Indian Bank was expected to be included in the Nifty Bank index, but its name is not part of the list.
This is only the second instance in the last seven sessions that the Indian Bank stock has declined.

Market Performance

Shares of Indian Bank are up 63.5% so far in 2025.
The stock has been delivering positive annual returns since 2020.
In the last five years, the stock is up nearly 10x in value.

Consolidation in PSU Banking Space

Indian Bank, along with other PSU lenders have also outperformed their private banking peers this year, over reports of consolidation within the PSU Banking space.