Nifty 50

About Nifty

The Nifty is the flagship benchmark of the National Stock Exchange (NSE), which is a well-diversified index, comprising top 50 companies in terms of free-float market capitalisation that are traded on the bourse.

Officially called the Nifty 50, the index is computed using the free float market capitalisation method, which is essentially the count of shares in active circulation in the market at any given point of time.

The Nifty, just like BSE benchmark Sensex, is today used for benchmarking portfolios and returns of mutual fund schemes and launching index funds.

The Nifty index was launched on April 22, 1996, with a base value of 1,000 counted from November 3, 1995. Live Nifty quotes are available on nseIndia.com, ETMarkets.com and numerous other web platforms and TV channels at any point of time.

The Nifty 50 is owned and managed by NSE Indices Limited (formerly known as India Index Services & Products Limited-IISL), a specialized company focused on an index as a core product.

The review of Nifty 50 is undertaken semi-annually based on data for six months ending January and July. The replacement of stocks in Nifty 50 (if any) is implemented from the last trading day of March and September. In case of any replacement in the index, a four weeks' prior notice is given to the market participants.

Additional index reconstitution may be undertaken in case any of the index constituent undergoes merger, demerger, delisting, specific cases of capital restructuring etc., in case any of the index constituent is moved to BZ series, if trading permission of any of the index constituent is withdrawn from F&O segment, if a security is suspended for trading from Capital Market for any reason and in case of any adverse regulatory findings or orders issued against any of the index constituent that necessitates removal of such stock from the index.

In case of a capital restructuring or voluntary delisting, equity shareholders' approval is considered as a trigger to initiate the replacement of such stock from the index through additional index reconstitution. For all other cases, replacements will be initiated based on notifications issued by the Exchange. Further, additional index reconstitution may be undertaken to screen for continued eligibility of an index constituent that may have undergone corporate action involving demerger in accordance with the guidelines prescribed under a separate section 'Corporate actions involving demerger/ spin-off' of this document.

There are defined eligibility criteria for selection of Nifty constituent stocks. The liquidity of a stock is measured by the market impact cost, which is essentially the cost involved in transacting a stock. For a stock to qualify for inclusion in the Nifty50, it must have traded at an average impact cost of 0.50 per cent or less for six months and for 90 per cent of observation cases. The constituents should have derivative contracts available on NSE.