Understanding What is Nifty: Whenever traders or investors discuss how the market performed for that day, they frequently use two terms, either ‘Nifty’ or ‘Sensex’. These both are market barometers that are used to judge market performance. In this article, we are going to discuss what is nifty and its implications. Keep Reading!

What is Nifty?

nifty 50 logo - what is nifty meaning

The Nifty or NIFTY 50 is the benchmark index of the National Stock Exchange (NSE) for the Indian stock market. Nifty is owned and managed by NSE Indices Limited (formerly known as India Index Services and Products (IISL)), along with the portfolio of 67 indices under the NIFTY brand as of September 30, 2016.

Just as Sensex was introduced by the Bombay stock exchange(BSE) in 1978-79, similarly Nifty is a major stock index in India introduced by the National Stock Exchange(NSE). Nifty 50 constitutes of the top 50 companies selected from the National stock exchange (NSE) based on the free-float market capitalization. Here are a few of the top characteristics of the Nifty 50:

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  • 50 top stocks are selected from diversified sectors.
  • The base year is taken as 1995 and the base value is set to 1000.
  • Nifty is calculated on 50 stocks actively traded in the NSE

Starting at 1,000 points in 1995, Nifty 50 has currently crossed 16,500 points as of August 2021.

Further, looking into the importance of NIFTY 50, it can be used for a variety of purposes such as benchmarking fund portfolios, tracking marketing returns, launching index funds, ETFs, and structured products, etc.

If Nifty goes up, it means that the market (as overall) is doing good and the shares of the top 50 companies in Nifty are going higher. On the other hand, if the Nifty goes down, it means that the market is not doing good and the shares of the top 50 nifty companies are going lower.

NIFTY 50 Stock List

 NameIndustryWeight
1.Reliance Industries Ltd.Energy - Oil & Gas10.01%
2.HDFC Bank Ltd.Banking9.59%
3.Infosys Ltd.Information Technology8.60%
4.Housing Development Finance Corporation Ltd.Financial Services6.55%
5.ICICI Bank Ltd.Banking6.41%
6.Tata Consultancy Services Ltd.Information Technology5.08%
7.Kotak Mahindra Bank Ltd.Banking3.67%
8.Hindustan Unilever Ltd.Consumer Goods3.24%
9.AXIS Bank Ltd.Banking2.83%
10.Larsen & Toubro Ltd.Construction2.66%
11.ITC Ltd.Consumer Goods2.60%
12.State Bank of India Banking2.36%
13.Bajaj Finance Ltd.Financial Services2.34%
14.Asian Paints Ltd.Consumer Goods1.98%
14.Bharti Airtel Ltd.Telecommunication1.82%
16.HCL Technologies Ltd.Information Technology1.57%
17.Maruti Suzuki India Ltd.Automobile1.47%
18.Tata Steel Ltd.Metals1.34%
19.Wipro Ltd.Information Technology1.18%
20.UltraTech Cement Ltd.Cement1.15%
21.Mahindra & Mahindra Ltd.Automobile1.09%
22.Sun Pharmaceutical Industries Ltd.Pharmaceuticals1.07%
23.Bajaj Finserv Ltd.Financial Services1.07%
24.Titan Company Ltd.Consumer Goods1.06%
25.Tech Mahindra Ltd.Information Technology1.00%
26.JSW Steel Ltd.Metals0.97%
27.Dr. Reddy’s Laboratories Ltd.Pharmaceuticals0.97%
28.Nestle India Ltd.Consumer Goods0.92%
29.IndusInd Bank Ltd.Banking0.90%
30.Tata Motors Ltd.Automobile0.89%
31.Power Grid Corporation of India Ltd.Energy - Power0.87%
32.Grasim Industries Ltd.Cement0.84%
33.HDFC Life Insurance Co. Ltd.Insurance0.83%
34.Divi’s Laboratories Ltd.Pharmaceuticals0.82%
35.NTPC Ltd.Energy - Power0.81%
36.Hindalco Industries Ltd.Metals0.80%
37.Bajaj Auto Ltd.Automobile0.79%
38.Adani Port and Special Economic ZoneInfrastructure0.76%
39.Cipla Ltd.Pharmaceuticals0.72%
40.Tata Consumer products Ltd.Consumer Goods0.66%
41.SBI Life Insurance Co.Insurance0.65%
42.UPL Ltd. Chemicals0.64%
43.Bharat Petroleum Corp. Ltd.Energy - Oil & Gas0.64%
44.Oil & Natural Gas Corporation Ltd.Energy - Oil & Gas0.63%
45.Britannia Industries Ltd.Consumer Goods0.63%
46.Hero MotoCorp Ltd.Automobile0.55%
47.Eicher Motors Ltd.Automobile0.55%
48.Shree Cement Ltd.Cement0.54%
49.Coal India Ltd.Mining0.45%
50.Indian Oil Corporation Ltd.Energy - Oil & Gas0.40%

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Nifty 50 Details and Fact Sheet

  • No of Constituents: 50
  • Methodology – FREE Float Market Capitalization
  • Launch Date: April 22, 1996
  • Base Year: November 02, 1995
  • Base Value: 1000
  • Calculatin Frequency: Real Time
  • Index Rebalancing: Half-Anually

Quick Note: Most index providers rebalance their indexes regularly, adding or removing stocks or changing the weights of existing index constituents. Nifty 50 typically rebalances on a half-annual basis, to re-pick the top 50 stocks from NSE at the time of rebalancing.

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You can find the factsheet of Nifty 50 here!

Also Read: How to open your demat and trading account at Angel Broking?

Closing Thoughts

In this article, we looked into what is Nifty and explained the constituents of Nifty 50. Looking into Nifty is a popular method to track the performance of the market that is used by Indian traders and Investors. Though Nifty 50 started quite late compared to the ‘Sensex” launch date, still it is more widely used among the trading community in India.

That’s all for this post on understanding what is Nifty. We hope this article was useful to you. Do comment below if you have got any questions regarding Nifty 50 meaning. Have a great day and Happy Investing!