The flagship stock index of the A regulated electronic marketplace in Mumbai where buyers and sellers trade shares and other securities at publicly visible prices. Read the full meaning of NSE (National Stock Exchange) (NSE) that tracks 50 large, actively traded companies chosen from the Nifty 100 and weighted by the market value of their shares available for public trading, so it shows how India's large listed companies move together. This is the index investors mean when they ask what is Nifty 50.
It is presented as a single figure, owned and operated by NSE Indices Ltd, a subsidiary of the NSE and governed by a prescribed set of rules. NSE Indices publishes the share of the NSE's Free float is the part of a listed company's shares that the public can freely buy and sell on the exchange, excluding promoter and government holdings. Read the full meaning of Free Float market value that these 50 stocks account for.
Eligibility rules and free-float calculation
Only companies in the Nifty 100 that have futures and options contracts on the NSE are eligible, and they must have traded at an average impact cost of 0.50% or less for 90% of observations over the last six months, for a basket of Rs 10 crore. The impact cost tells how easily the shares can be traded.
Since 2009, the index is calculated using free‑float market value. For each company its market value is multiplied by its investible weight factor (IWF), the figures are summed, then divided by the base market value and finally multiplied by the base value. The base date is 3 November 1995 and the base value is 1,000.
If a company has a market value of Rs 10,000 crore and an IWF of 50%, Rs 5,000 crore is counted. Companies with a larger counted value move the index more.
NSE Indices reviews the list twice a year through its Index Maintenance Sub-Committee.
Benchmark for index funds and derivatives
The index is a benchmark for large‑cap funds and An open ended mutual fund that holds the securities of a market index, such as the Nifty 50, in the same weights, so its returns stay close to that index. Read the full meaning of Index Fund are crafted to track it. Weekly and monthly Nifty derivatives, too, are built around it.
The companies are picked by fixed rules, not ranked as the best and each carries a weight based on its counted market value instead of an equal share.
Nifty 50 is an NSE index, while Sensex is a separate BSE index that tracks 30 companies, so the two numbers cannot be compared.