What Is Nifty 50?
Nifty 50 is a stock market index that represents the top 50 companies listed on the National Stock Exchange (NSE) of India. These companies are from various sectors and form a benchmark for the Indian stock market's performance.
The Nifty 50 provides a snapshot of the overall health of the stock market and the Indian economy, much like the SENSEX does for the Bombay Stock Exchange (BSE). It is widely followed by investors and traders in India and globally.
- The Nifty 50 includes 50 major companies from diverse sectors such as banking, energy, IT, and consumer goods.
- It is calculated using free-float market capitalization.
- Nifty 50 is a widely-used benchmark for mutual funds, portfolios, and ETFs.
How Is Nifty 50 Calculated?
The Nifty 50 is calculated using a free-float market capitalization method, which means it takes into account the market value of all publicly traded shares, excluding those held by promoters and government entities.
Step-by-Step Calculation Formula
The formula used to calculate the Nifty 50 index is:
Nifty 50 = (Sum of Free-Float Market Capitalization of 50 Companies / Base Market Capitalization) × Base Value
Where:
- Free-Float Market Capitalization: The market capitalization of a company's freely available shares for trading (excludes promoter holdings).
- Base Market Capitalization: The market capitalization of the Nifty 50 at its inception (set to 100 points in 1995).
- Base Value: The starting value of the Nifty 50 index, initially set at 100 points in 1995.
Example Calculation
If the total free-float market capitalization of all 50 companies in the Nifty 50 index is ₹15,000 crore, and the base market capitalization is ₹12,000 crore, then:
Nifty 50 = (₹15,000 crore / ₹12,000 crore) × 100 = 125
This means the Nifty 50 index has increased by 25% from its inception.
50 Companies in Nifty 50
| Company | Sector | Weightage (%) |
|---|---|---|
| Reliance Industries | Energy | 10.2% |
| HDFC Bank | Banking | 8.5% |
| Infosys | IT | 7.2% |
| TCS | IT | 7.0% |
| ICICI Bank | Banking | 6.4% |
| Hindustan Unilever | FMCG | 5.9% |
| Bharti Airtel | Telecom | 5.4% |
| ITC | FMCG | 5.1% |
| State Bank of India | Banking | 4.7% |
| Axis Bank | Banking | 4.6% |
| Asian Paints | Consumer Goods | 4.5% |
| Maruti Suzuki | Automobile | 4.3% |
| HCL Technologies | IT | 4.1% |
| Wipro | IT | 3.9% |
| Ultratech Cement | Cement | 3.7% |
| Tata Steel | Metals | 3.5% |
| Sun Pharmaceutical | Pharmaceuticals | 3.3% |
| Bajaj Finance | Financial Services | 3.2% |
| NTPC | Energy | 3.1% |
| Tech Mahindra | IT | 2.9% |
| Dr. Reddy's Laboratories | Pharmaceuticals | 2.7% |
| Kotak Mahindra Bank | Banking | 2.6% |
| IndusInd Bank | Banking | 2.5% |
| Coal India | Energy | 2.4% |
| Power Grid Corporation | Utilities | 2.3% |
| Grasim Industries | Cement | 2.2% |
| Larsen & Toubro | Engineering | 2.1% |
| Mahindra & Mahindra | Automobile | 2.0% |
| Bajaj Auto | Automobile | 1.9% |
| Marico | FMCG | 1.8% |
| Shree Cement | Cement | 1.7% |
| Hero MotoCorp | Automobile | 1.6% |
| Adani Ports | Logistics | 1.5% |
| Divi's Laboratories | Pharmaceuticals | 1.4% |
| UPL | Chemicals | 1.3% |
| Apollo Hospitals | Healthcare | 1.2% |
| Petronet LNG | Energy | 1.1% |
| HDFC Life Insurance | Insurance | 1.0% |
| Axis Bank | Banking | 0.9% |
| Bharti Airtel | Telecom | 0.8% |
| Bandhan Bank | Banking | 0.7% |
| JSW Steel | Metals | 0.6% |
| IRCTC | Services | 0.5% |
| SBI Life Insurance | Insurance | 0.4% |
| GAIL India | Energy | 0.3% |