Nifty / Nifty 50 / Nifty Bank – Definition, Calculation Process, Companies & more

NSE has Nifty as its benchmark index and the significance it bears needs to be known in order to take steps into the stock market.

Prior to the establishment of NSE, BSE had a monopoly control over the Indian stock market, being the sole exchange. The idea took a turn and monopoly ended in the year 1992, when National Stock Exchange (NSE) entered the market.

The idea incorporated in a similar fashion as it did for BSE, where thousands of company listings make it difficult to calculate the performance of the market.

As a result, Nifty 50 is taken into consideration, based on which per day scenario of the exchange can be determined.

Speaking of the Nifty Bank, on the contrary, it comprises of the Indian Banking Stocks, and the index portrays the likewise performance.

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What is Nifty?

If you wonder the emergence of the word Nifty, it is a composite of the words “National” and “Fifty”.

An index of 50 companies, which are well established and financially sound, is piled up by NSE which then goes on, to derive the performance as a whole. This is the reason why, another reference made to Nifty is with Nifty 50.


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How is Nifty Calculated?

NIFTYFree float market has the shares of company listed within, where the offering is made to the general public in market.

Likewise certain set of shares are not open to the public and are held by the government or the founders and they are excluded from the free float domain.

For the Nifty Calculation, the free float method of calculation is taken into account examining the 50 companies, with some standard factors.

  • Year and value for the base in calculation is taken as 1995 and 1000 respectively.
  • The 50 free float stocks which are used to calculate Nifty are collectively derived from 24 different sectors.
  • Ownership and management of Nifty is designated to India Index Services and Products (IISL)

Market capital weighted index is used by NSE, where the market capitalization of a company is price of the company’s share multiplied by the number of shares issued in the market. This derived market capitalization is again multiplied by the free float percentage.

An index divisor comes into play now, which is divided with the free float market capitalization, to obtain the end Nifty index.

It is a daily procedure, and index is calculated on a daily basis taking into account the current market value as the numerator, base market capital as the denominator, which are further multiplied by 1000, the base value.


What is Nifty 50?

NSE bears a flagship index knows as Nifty 50, where top 50 companies listed in the NSE are pointed out, for the calculation. Weighted average method is used to calculate Nifty, and is done on a per day basis.


How Nifty 50 Companies are selected?

Here are the factors, which are taken into consideration pinpointing the companies that can be included in the Nifty 50 segment.

  • Companies included in the index are the ones which are known to have been traded in an average impact cost of 0.50 % or less all the while in the last six months.
  • Twice a float adjusted market capitalization of the current smallest constituent is necessary.
  • Company must be based out of India and should be listed in NSE.
  • Stock which is available for trading in the futures and the options segments are liable for inclusion in the index.
  • Some other factors to be taken into account are liquidity, market capitalization, trading frequency etc.

List of Shares in Nifty 50

We have enlisted the Nifty 50 Shares dated 8 January 2020.

SI No.Company
1 Tata Consultancy Services Ltd
2 Ultratech Cement Ltd
3 HCL Technologies Ltd
4 Bharti Airtel Ltd
5 Yes Bank Ltd
6 Bajaj Auto Ltd
7 Tech Mahindra Ltd
8 Reddys Laboratories Ltd
9 Bajaj Finserv Ltd
10 Bajaj Finance Ltd
11 Grasim Industries Ltd
12 Nestle India Ltd
13 Hindustan Unilever Ltd
14 ICICI Bank Ltd
15 Wipro Ltd
16 UPL Ltd
17 HDFC Bank Ltd
18 ITC Ltd
19 Asian Paints Ltd
20 Housing Development Finance Corporation Ltd
21 Britannia Industries Ltd
22 Adani Ports and Special Economic Zone Ltd
23 IndusInd Bank Ltd
24 Vedanta Ltd
25 Bharti Infratel Ltd
26 Reliance Industries Ltd
27 Cipla Ltd
28 NTPC Ltd
29 GAIL (India) Ltd
30 Power Grid Corporation Of India Ltd
31 Sun Pharmaceutical Industries Ltd
32 State Bank Of India
33 Mahindra & Mahindra Ltd
34 Maruti Suzuki India Ltd
35 Axis Bank Ltd
36 Hero MotoCorp Ltd
37 Tata Steel Ltd
38 Kotak Mahindra Bank Ltd
39 Coal India Ltd
40 Oil & Natural Gas Corporation Ltd
41 Bharat Petroleum Corporation Ltd
42 Tata Motors Ltd
43 Infosys Ltd
44 Titan Company Ltd
45 Zee Entertainment Enterprises Ltd
46 Hindalco Industries Ltd
47 Larsen & Toubro Ltd
48 Indian Oil Corporation Ltd
49 JSW Steel Ltd
50 Eicher Motors Ltd

The changes and balance to the Nifty Stocks list is made on a 6 months ending basis.


What is Nifty Bank?

Nifty Bank included the listing of the top and the most financially stable Indian Banks. Likewise Nifty, the Nifty Bank Index is the flagship index of the Indian banking stock companies.

Such a benchmark is used by multiple intermediaries and individuals to jolt down the performance of thee Indian Banking sector as a whole.


List of Shares in Bank Nifty & Weightage

Find the list of Nifty Bank Stocks, as on 31st December 2019 along with their weightage.

SI No.CompanyWeightage
1HDFC Bank28.66%
2ICICI Bank19.87%
3Axis Bank13.39%
4Kotak Mahindra Bank12.84%
5State Bank of India (SBI)11.08%
6IndusInd Bank7.87%
7Federal Bank1.52%
8RBL Bank1.41%
9Bank of Baroda1.08%
10Yes Bank0.90%
11IDFC Bank Ltd.0.80%
12Punjab National Bank0.56%

Nifty or Nifty 50 – Conclusion

We assure you would be well aware of the terms Nifty, Nifty 50, Nifty Bank as of now.

Beginners often find it challenging to know how the entire market works and this article would indeed be the easiest way the entire concept of Nifty and NSE can be put forward, in understandable terms.


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NIFTY Breaks Record, touches 10k Mark, is this the right time to Invest!!!

Nifty breaks record & is reaching new heights but as the experts say there is no right time to invest in market.

Nifty - Breaks all record, touches 10k markToday when we are reading this article the SENSEX & NIFTY is breaking all record & reaches all-time high. At the time of writing, this article SENSEX was at 32k plus and NIFTY was at its high of 10k plus. The average yield for three years was whopping 25 percent for nifty.

Experts say – Nifty may touch 11k by end of 2017

As Nifty touches 10k & many of us might think that the market is overheated and valuations are stretched in the current scenario. In its latest report, HSBC predicts India to be the third largest economy on the globe beating Japan and Germany. By 2028, India’s GDP is estimated to be USD 7 trillion from present USD 2.3 trillion according to HSBC report. Many trade analyst also beleive that nifty will accelerate further & will break 11k barrier by end of 2017.

Now the question arises….is this the right time to invest or one should wait for some correction to happen!

A look at the government spending in various sectors and policy changes indicates that we can prove HSBC report to be true in future.

There is a saying that – it’s always the right time to invest in stock market but the timing has to be right. If you understand the true meaning of above statement, then the market is always ready to make you rich.

Yet, if you don’t trust the current market valuation and don’t want to invest your lump-sum wealth in one go, you should choose the ‘SIP’ route offered by all mutual fund houses. If you are spending for long-term through Systematic Investment Plans (SIP), i.e. investing a small amount at regular intervals for a number of years, your investments will gain the benefit of rupee cost averaging. This will always give you an upper hand in the market and will remove the concern caused by the volatility, i.e. the market swings caused by high liquidity in the market.

REMEMBER- stick to the long-term plan even if the market goes down 50%. That’s how the magic of compounding (the eighth wonder according to Albert Einstein) will make to rich.

If you understand the market and growth story of a company, then it’s never too late to invest in the market. There were always fast moving stocks (Example – Graphite India, Vakrangee, etc.), turn around stories (example – Ashok Leyland) and much more which gave an excellent result in past few years. So, if you are able to pick them up on right time then you always make money.

If you are skeptical in you approach, then let the masters of the field do their job and chose the mutual fund to appreciate your wealth depending on your risk appetite.

In case you need money for your household expenses in near term then it’s better to stay away from the market as of now or pull back your invested money and park them in debt fund or the liquid fund.

Being good investor always chose long term as approach and invest in companies who have good growth story and future expansion plans managed on good governance ethics. Yes, markets can really test your patience and that is the key to investment. Of course, a prudently-chosen diversified portfolio will hardly go wrong.

Hence, it is ideal for an average investor to stay diversified and focus on his/her asset allocation. At times, when you anticipate that markets have gone up, split your investments in smaller proportions or tranches, but ensure that you invest and not pause after a while. Over a period of time, markets will keep rising with the progression in earnings of the corporate sector. There could be longer waiting periods, but ultimately, the markets will reflect the earnings.

Happy Investing!

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