Stock Market Indices give an insight into the overall trends of the capital markets and sentiment of the investors / traders towards a particular stock or set of stocks in an industry. Simply, an index is the stock exchange creating a portfolio of the top companies held by it based on market capitalization in the respective category.
Some of the important stock market indices in India are:
- Benchmark indices like NSE Nifty and BSE Sensex
- Broad-based indices like Nifty 50 and BSE 100
- Indices based on market capitalization like the BSE Laregcap, BSE Midcap and BSE Smallcap
- Sector indices like Bank Nifty, Fin Nifty, Nifty FMCG Index and CNX IT
In this article we will deep dive into Nifty 50 index and the list of stocks in Nifty 50.
What is Nifty 50?
Nifty 50 index is one of the most important stock market index in India. It has 50 major companies across 13 sectors that represent the overall economic conditions of the Indian economy. It is an ideal index for derivatives trading. Furthermore, it was launched in 1996 by NSE Indices Limited (formerly known as India Index Services & Products Limited).
Eligibility criteria for getting listed under Nifty 50
Below are the eligibility criteria’s that must be fulfilled by a company to become a part of the Nifty 50 index:
- The company must be based in India and listed on the NSE.
- The stock must be available for trading in the NSE’s Futures & Options. Also, the stock must be a part of NIFTY 100 index.
- Equity securities with Differential Voting Rights are eligible to be a part of the Nifty 50 index, provided they fulfil certain requirements.
- The stock under consideration must have traded at an average impact cost of 0.50% or less, over the course of last 6 months for 90% of the observations.
- The company’s trading frequency must be 100% for the previous 6 months.
- The avg. free float market capitalisation of the company must be at least 1.5 times the average free float market capitalisation of the smallest constituent of the Nifty 50.
Nifty 50 – Portfolio Characteristics
|Methodology||Free Float Market Capitalization|
|Number of Constituents||50|
|Launch Date||April 22, 1996|
|Base Date||November 03, 1995|
|Calculation Frequency||Real Time|
Nifty 50 – Weightage of Different Sectors
|Oil & Gas||12.74%|
|Cement & Cement Products||02.29%|
|Fertilisers & Pesticides||0.50%|
List of Nifty 50 Stocks – By Sector and Weightage
|Reliance Industries||Oil & Gas||11.09%|
|HDFC Bank||Financial Services||8.51%|
|ICICI Bank||Financial Services||7.35%|
|Kotak Mahindra Bank||Financial Services||3.69%|
|Larsen & Toubro||Construction||2.99%|
|Hindustan Unilever||Consumable Goods||2.64%|
|Axis Bank||Financial Services||2.61%|
|State Bank of India||Financial Services||2.53%|
|Bajaj Finance||Financial Services||2.53%|
|Asian Paints||Consumable Goods||1.95%|
|Maruti Suzuki India||Automobile||1.51%|
|Bajaj Finserv||Financial Services||1.33%|
|Mahindra & Mahindra||Automobile||1.03%|
|UltraTech Cement||Cement & Cement Products||0.97%|
|Power Grid Corporation of India||Power||0.95%|
|Nestle India||Consumable Goods||0.85%|
|Grasim Industries||Cement & Cement Products||0.82%|
|IndusInd Bank||Financial Services||0.80%|
|ONGC||Oil & Gas||0.74%|
|Adani Ports and SEZ||Services||0.69%|
|Dr. Reddy’s Laboratories||Pharmaceuticals||0.67%|
|HDFC Life||Financial Services||0.66%|
|SBI Life||Financial Services||0.67%|
|Tata Consumer Products||Consumable Goods||0.59%|
|Britannia Industries||Consumable Goods||0.55%|
|UPL||Fertilisers & Pesticides||0.50%|
|BPCL||Oil & Gas||0.47%|
|Shree Cement||Cement & Cement Products||0.45%|
|Indian Oil Corporation||Oil & Gas||0.44%|
How to invest in Nifty 50 stocks?
To invest in Nifty 50 you need to open Demat account online with a trustworthy stock broker. Also, following investment advice from experts is great but doing your own analysis is very crucial. Start today, start slow and build your wealth gradually. Setting long-term investment strategy will help you better grasp the value of investing.
Happy Investing 😇