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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