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:

  • 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.

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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 & Gas10.56%
2.HDFC Bank Ltd.Banking8.87%
3.Infosys Ltd.Information Technology8.62%
5.ICICI Bank Ltd.Banking6.72%
4.Housing Development Finance Corporation Ltd.Financial Services6.55%
6.Tata Consultancy Services Ltd.Information Technology4.96%
7.Kotak Mahindra Bank Ltd.Banking3.91%
10.Larsen & Toubro Ltd.Construction2.89%
8.Hindustan Unilever Ltd.Consumer Goods2.81%
11.ITC Ltd.Consumer Goods2.63%
13.Bajaj Finance Ltd.Financial Services2.52%
12.State Bank of India Banking2.40%
14.Bharti Airtel Ltd.Telecommunication2.33%
9.AXIS Bank Ltd.Banking2.29%
14.Asian Paints Ltd.Consumer Goods1.92%
16.HCL Technologies Ltd.Information Technology1.68%
23.Bajaj Finserv Ltd.Financial Services1.41%
24.Titan Company Ltd.Consumer Goods1.35%
25.Tech Mahindra Ltd.Information Technology1.30%
17.Maruti Suzuki India Ltd.Automobile1.28%
19.Wipro Ltd.Information Technology1.28%
20.UltraTech Cement Ltd.Cement1.17%
18.Tata Steel Ltd.Metals1.14%
30.Tata Motors Ltd.Automobile1.12%
22.Sun Pharmaceutical Industries Ltd.Pharmaceuticals1.10%
21.Mahindra & Mahindra Ltd.Automobile1.09%
31.Power Grid Corporation of India Ltd.Energy - Power0.96%
28.Nestle India Ltd.Consumer Goods0.93%
32.Grasim Industries Ltd.Cement0.86%
33.HDFC Life Insurance Co. Ltd.Insurance0.86%
34.Divi’s Laboratories Ltd.Pharmaceuticals0.84%
36.Hindalco Industries Ltd.Metals0.82%
26.JSW Steel Ltd.Metals0.82%
35.NTPC Ltd.Energy - Power0.82%
27.Dr. Reddy’s Laboratories Ltd.Pharmaceuticals0.77%
29.IndusInd Bank Ltd.Banking0.72%
44.Oil & Natural Gas Corporation Ltd.Energy - Oil & Gas0.70%
41.SBI Life Insurance Co.Insurance0.69%
38.Adani Port and Special Economic ZoneInfrastructure0.68%
39.Cipla Ltd.Pharmaceuticals0.67%
40.Tata Consumer products Ltd.Consumer Goods0.63%
37.Bajaj Auto Ltd.Automobile0.57%
45.Britannia Industries Ltd.Consumer Goods0.57%
42.UPL Ltd. Chemicals0.51%
43.Bharat Petroleum Corp. Ltd.Energy - Oil & Gas0.48%
48.Shree Cement Ltd.Cement0.47%
47.Eicher Motors Ltd.Automobile0.45%
49.Coal India Ltd.Mining0.43%
46.Hero MotoCorp Ltd.Automobile0.43%
50.Indian Oil Corporation Ltd.Energy - Oil & Gas0.41%

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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.

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!

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