What is NSE Nifty 50: Indices, stocks list, history details
The first thing that comes to mind when speaking of a stock market is its index -- to be more specific, its benchmark index. NSE, or National Stock Exchange, is the younger of the two stock exchanges in India and Nifty 50, Nifty, or NSE Nifty 50 is its most popular and benchmark index.
Kolkata: National Stock Exchange, or NSE, is the younger of the two stock exchanges of India. NSE was set up in Mumbai, the financial capital of India, in 1992. It ushered in modern technology in the stock market such as trading in dematerialised stocks. NSE now has more than 11 crore investors -- a number so big that just about a dozen countries in the world whose total population exceeds that number.
As the name implies, NIFTY 50 index is constructed from a basket of 50 stocks, which needless to say, are the most prominent stocks in the Indian stock market. Therefore, the Nifty's underlying basket of 50 stocks is supposed to be a representational sample that can indicate the stock market's performance as a whole. This is a broad indicator, it has been carefully constructed and honed to rise to this status. To mirror the situation in the country's important industrial sectors, the stocks underlying Nifty 50 have been chosen from 13 different sectors for the sake of diversification. These sectors are: Oil and gas, consumer goods, information technology, financial services, automobiles, construction, telecommunication, pharmaceuticals, power, cement, cement products, metals, fertilizers, pesticides and media and entertainment.
Stocks in Nifty 50
It is clear from the name that there are 50 stocks in the Nifty 50 basket. The stocks are: RELIANCE, BHARTI, NESTLEIND, BAJAJ-AUTO, TCS, BEL, ULTRACEMCO, TATAMOTORS, ADANIPORTS, BAJFINANCE, TATASTEEL, HDFCLIFE, HINDALCO, BRITANNIA, KOTAKBANK, GRASIM, EICHERMOT, TATACONSUM, AXISBANK, HEROMOTOCO, BAJAJFINSV, ASIANPAINT, SUNPHARMA, JSWSTEEL, MARUTI, CIPLA, DRREDDY, SBIN, APOLLOHOSP, WIPRO, ONGC, ADANIENT, SBILIFE, TITAN, COALINDIA, TECHM, HDFCBANK, HINDUNILVR, L&T, BPCL, M&M, TRENT, POWERGRID, ITC, INDUSINDBK, SHRIRAMFIN, HCLTECH, ICICIBANK, NTPC, INFY. Every six months, the performance of the stocks is reviewed and on that basis the index could be constituted.
Which stocks are eligible to move into Nifty 50
Needless to say, the Nifty 50 basket is an elite basket. In order to get into this group, a stock has to pass through quite a few demanding filters. The first criteria is obvious -- the stock has to be of a company that is listed in NSE. The stock must have been listed at least six months earlier. It should be traded via derivatives contracts. The second filter is that of Free-Float Market Capitalisation. These 50 stocks are selected on the basis of their free-float market capitalisation. (Incidentally, free float market cap is calculated by multiplying a stock's current market value by the number of shares available in the market.) The part of a company's shares held by governments, strategic investors and promoters is not applicable in this regard.
Trading volume is another criteria that is applied. So is liquidity. The stock must have 100% trading volume in the preceding six months in order to be eligible for Nifty 50. The index is reviewed, and rebalanced if necessary, after every six months. It usually takes place on July 31 and December 31. An important point to note is that if a stock is admitted to the Nifty 50 basket, one stock must be eliminated to keep the number 50 intact.
NSE indices
NIFTY 50, NIFTY SMALLCAP 250, NIFTY NEXT 50, NIFTY SMALLCAP 50, NIFTY 100, NIFTY SMALLCAP 100, NIFTY 200, NIFTY MICROCAP 250, NIFTY TOTAL MARKET, NIFTY LARGEMIDCAP 250, NIFTY 500, NIFTY MIDSMALLCAP 400, NIFTY500 MULTICAP 50:25:25, NIFTY500 LARGEMIDSMALL EQUAL-CAP WEIGHTED, NIFTY MIDCAP 150, NIFTY MIDCAP 50, NIFTY MIDCAP SELECT and NIFTY MIDCAP 100.
Apart from these, NSE has 19 sectoral indices and these are NSE NIFTY AUTO, NIFTY METAL, NIFTY BANK, NIFTY PHARMA, NIFTY FINANCIAL SERVICES, NIFTY PRIVATE BANK, NIFTY FINANCIAL SERVICES 25/50, NIFTY PSU BANK, NIFTY FINANCIAL SERVICES EX BANK, NIFTY REALTY, NIFTY FMCG, NIFTY CONSUMER DURABLES, NIFTY HEALTHCARE, NIFTY OIL AND GAS INDEX, NIFTY IT, NIFTY MIDSMALL FINANCIAL SERVICES, NIFTY MEDIA, NIFTY MIDSMALL HEALTHCARE and NIFTY MIDSMALL IT & TELECOM.
Even these are not all. NSE has dozens of thematic and strategy indices. NSE Indices is a subsidiary company of NSE and it offers index development services on various asset classes. The NSE indices are so significant that according to reports more than 60 mutual funds have been launched which track different indices of the NSE.