Whether you invest or not, there is one word you keep hearing: “Nifty 50”. But what exactly is Nifty 50 Index, and how does it work?
Nifty 50 is one of the two main indices in India, while the other one is the SENSEX.
The National Stock Exchange unveiled the Nifty market index on April 21, 1996, by combining the words “National Stock Exchange” and “Fifty.”The flagship index of the NSE, Nifty 50, is benchmark-based and displays the top 50 equity stocks traded on the stock market among an aggregate of 1600 stocks. Jump into this article to discover more about the NSE Nifty 50.
What Is NIFTY
NIFTY is a market index introduced by the National Stock Exchange. NIFTY 50 is a benchmark-based index and also the flagship of NSE, which showcases the top 50 equity stocks traded in the stock exchange out of a total of 1600 stocks.
These stocks are primarily from 12 sectors of the Indian economy, including information technology, financial services, consumer goods, entertainment and media, financial services, metals, pharmaceuticals, telecommunications, cement and its products, automobiles, pesticides and fertilizers, energy, and other services.
Nifty 50 is owned by the India Index Services and Products (IISL), which is a fully-owned subsidiary of the National Stock Exchange Strategic Investment Corporation Limited.
How Do They Select Stocks For NIFTY 50
NIFTY 50 follows the trends and patterns of blue-chip companies, i.e. the most liquid and largest Indian securities.
There is also an eligibility criterion to first be considered a potential player.
- The company must be based in India and listed on the National Stock Exchange (NSE).
- The stock should be highly liquid, measured through its average impact cost — the cost of executing trades relative to its index weight and market capitalization. For eligibility, this impact cost must stay at or below 0.50% for six months, with at least 90% of trades evaluated on a ₹10 crore portfolio.
- The company must have been traded on every single trading day over the past six months.
- The stock’s average free-float market capitalization should be at least 1.5 times that of the smallest company currently included in the index.
- Companies that issue Differential Voting Rights (DVR) shares can also be included in the index.
NIFTY 50 Companies
| S.No. | Company Name | Sector |
|---|---|---|
| 1 | Adani Enterprises Ltd. | Diversified / Conglomerate |
| 2 | Adani Ports & SEZ Ltd. | Ports & Logistics |
| 3 | Apollo Hospitals Enterprise Ltd. | Healthcare Services |
| 4 | Asian Paints Ltd. | Paints & Chemicals |
| 5 | Axis Bank Ltd. | Banking |
| 6 | Bajaj Auto Ltd. | Automobiles |
| 7 | Bajaj Finance Ltd. | NBFC / Financial Services |
| 8 | Bajaj Finserv Ltd. | Financial Services |
| 9 | Bharat Electronics Ltd. | Defence & Electronics |
| 10 | Bharti Airtel Ltd. | Telecom |
| 11 | Coal India Ltd. | Mining & Minerals |
| 12 | Cipla Ltd. | Pharmaceuticals |
| 13 | Eternal | e-Commerce / Online Services |
| 14 | Dr. Reddy’s Laboratories Ltd. | Pharmaceuticals |
| 15 | Eicher Motors Ltd. | Automobiles |
| 16 | Grasim Industries Ltd. | Cement & Chemicals |
| 17 | HCL Technologies Ltd. | IT Services |
| 18 | HDFC Bank Ltd. | Banking |
| 19 | HDFC Life Insurance Company Ltd. | Insurance |
| 20 | INDIGO | Airli |
| 21 | Hindalco Industries Ltd. | Metals & Mining |
| 22 | Hindustan Unilever Ltd. | FMCG |
| 23 | ICICI Bank Ltd. | Banking |
| 24 | Infosys Ltd. | IT Services |
| 25 | ITC Ltd. | FMCG / Hotels / Conglomerate |
| 26 | JSW Steel Ltd. | Steel |
| 27 | Jio Financial Services Ltd. | Financial Services |
| 28 | Kotak Mahindra Bank Ltd. | Banking |
| 29 | Larsen & Toubro Ltd. | Infrastructure & Engineering |
| 30 | Mahindra & Mahindra Ltd. | Automobiles |
| 31 | Maruti Suzuki India Ltd. | Automobiles |
| 32 | Nestlé India Ltd. | FMCG |
| 33 | NTPC Ltd. | Power Generation |
| 34 | Oil & Natural Gas Corporation Ltd. | Oil & Gas |
| 35 | Power Grid Corporation of India Ltd. | Power Transmission |
| 36 | Reliance Industries Ltd. | Conglomerate (Energy, Retail, Telecom) |
| 37 | SBI Life Insurance Company Ltd. | Insurance |
| 38 | State Bank of India | Banking |
| 39 | Sun Pharmaceutical Industries Ltd. | Pharmaceuticals |
| 40 | Tata Consultancy Services Ltd. | IT Services |
| 41 | Tata Consumer Products Ltd. | FMCG |
| 42 | Tata Motors Ltd. | Automobiles |
| 43 | Tata Steel Ltd. | Steel |
| 44 | Titan Company Ltd. | Consumer Goods / Jewellery |
| 45 | UltraTech Cement Ltd. | Cement |
| 46 | UPL Ltd. | Agrochemicals |
| 47 | Wipro Ltd. | IT Services |
| 48 | Shriram Finance Ltd. | NBFC / Financial Services |
| 49 | Britannia Industries Ltd. | FMCG |
| 50 | Tech Mahindra Ltd. | IT Services |
How is NIFTY for Share Market Calculated?
NIFTY 50 is calculated using the Free-Float Market Capitalization Weighted Method — meaning the index value is based on the total market value of India’s top 50 companies that are available for public trading.
NIFTY Index Value = (Current Free-Float Market Cap of 50 Companies / Base Market Cap) × 1000
- Base Year: 1995
- Base Value: 1000
- Base Market Cap: Market cap of NIFTY companies in 1995 (adjusted)
Suppose the total free-float market cap of all 50 companies today = ₹120 lakh crore
Base Market Cap (adjusted from 1995) = ₹12,000 crore
NIFTY = (120,00,000 crore / 12,000 crore) × 1000 = 10,000
So NIFTY would trade around 10,000.
History Of NIFTY 50
- 1995–1999: Birth of NIFTY 50
NIFTY 50 was launched in 1996 with 1995 as its base year (base value 1000). It became India’s first modern, automated, free-float market-cap index, representing the country’s top companies and quickly emerging as a standard benchmark for investors.
- 2000–2003: Dot-Com Boom & Crash
The early 2000s saw tech stocks soar, making IT companies dominant in the index. But when the dot-com bubble burst, NIFTY fell sharply, testing market resilience and reshaping sector weights within the index.
- 2004–2008: Growth & Market Reforms
- 2008–2010: Global Financial Crisis & Recovery
- 2014–2019: Long Bull Run
- 2020–2021: COVID Crash & Fastest Recovery
- 2022–Present: India’s Market Surge
