Instrument that provided a fixed return are not included.į&O criteria: Stocks must also be available for trading in NSE’s Futures & Options (F&O) segment. Liquidity: The share must have traded at an average impact cost equal to or less than 0.50% during the last six months.įloat-Adjusted Market Capitalization: Eligible companies must have at least double the float-adjusted market cap of the current, smallest constituent of the index.Įligible Securities: All common shares listed on the NSE (equity and not fixed income in nature) are eligible for inclusion in the NIFTY 50 index. Only companies headquartered in India are considered for the index. However, it should be noted that the market cap of most of these companies is in ‘thousand crores’. So, if a company has 40lakh shares available to the public, and each share is valued at Rs100, the free-float market capitalization of the company will be:Ĥ0,00,000*100 = Rs40cr. Consequently, a company’s free-float market cap would be, number of shares available to public * market price of each share. This excludes promoter holding or any holding apart from the public. In 2009, this was changed to the free-float market capitalization method to stay in line with global practices.įree-float means the total number of shares available to the public to trade. The index was earlier calculated according to the market capitalization method.

These are further divided into the Nifty auto index, the Nifty bank index, the Nifty IT index, and the Nifty FMCG index, among others, based on the sector the company represents. The constituents of the index include, among others, HDFC, ICICI Bank, Hindustan Unilever, ITC, Larsen and Toubro (L&T), Reliance Industries and State Bank of India (SBI). Incepted in 1995, the base year of the benchmark index is also the same, while its base value is set as 1,000. In other words, the market movement in these 50 companies decides the direction in which the Nifty will move. This is because the index comprises the weighted average of 50 companies, as opposed to the Sensex which comprises the weighted average of 30 stocks, representing the biggest industrial sectors. The term was coined using the words ‘National’ and ‘Fifty’.

It is managed by the National Stock Exchange (NSE) through its subsidiary India Index Services and Products (IISL). Like the Bombay Stock Exchange’s benchmark Sensex, which is a constituent of 30 well-performing, heavyweight stocks, the Nifty, or the Nifty50 is another broad-based stock market index in India. Introduction to Nifty What is the Nifty 50?

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