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What is Nifty?

The Nifty meaning in stock market is a derivation from the mix of two words, i.e. “National Stock Exchange” and “fifty”. It is an abbreviation of the National Stock Exchange Fifty. It is a collection of top performing 50 equity stocks that are actively trading in the index. However, 51 stocks are currently trading on Nifty. Hence, Nifty is also known as Nifty50 or CNX Nifty.

Nifty is a popular stock index. The National Stock Exchange of India introduced it. This index was founded in 1992 and started trading in 1994. It is owned and managed by India Index Service & Products Limited (IISL). IISL is an Indian specialized company which focuses on an index as its focus product. It has a variety of financial products like index funds, index futures and options, stock futures and options, etc.

The functions of Nifty include allowing investors to track the overall market sentiments, trends, and performance of various industries and sectors.

Recommended Read: How to Invest in Nifty 50?

What is an Index?

A stock index is a measurement of the changes that take place in the stock market. It measures price movement and market performance. For creating an index, one has to group some stocks from the list of stocks with similar characteristics. This grouping of stocks can be on the type of industry, total market capitalization or the size of the company. 

To calculate the value of the stock market index, one can use the values of the underlying group of stocks. Any change in the value of underlying stock also leads to a change in the stock index value. If the price of most of the stocks rises, the index will again rise and vice-versa. 

Thus, an index is indicative of changes in the market. It reflects the overall market investing sentiment and price movements. Investors and financial managers use this to measure the value of portfolio holding. They can also use it for comparing the performance with the benchmark index. 

Some of the standard indices in India are 
  • Benchmark indices like NSE Nifty and BSE Sensex
  • A broad-based index like Nifty 50, BSE 100, Nifty Next 50, etc.
  • Market capitalization indices like BSE Smallcap, BSE Mid Cap, Nifty Small cap, Nifty Mid Cap, etc.
  • Sectoral indices like the Nifty FMCG index, Nifty Bank index, Nifty IT, Nifty Auto, etc.

Nifty50 covers the following sectors of the Indian economy.

AutomotiveEngineeringMetals & Mining
Banking/FinanceFood & BeverageOil & Gas
ChemicalsManufacturingRetail/Real Estate
Consumer durables & non-durablesMediaTelecom

It follows the patterns and trends of blue-chip companies. These are the largest companies with high liquidity in India. Nifty also contains several sub-indices based on separate asset classes, sectors, or segments. They are NIFTY IT, NIFTY Next 50, NIFTY Bank, NIFTY Small Cap, and many more. Also, Nifty has 1600 companies listed in it.

NIFTY50 meaning is same as nifty, is a benchmark index by NSE. It is one of the two national indices and a broad-based index of the National Stock Exchange NSE. Also, NSE is a leading stock exchange in India. It is the largest trading platform in India. Another national index is Sensex which is a product of the Bombay Stock Exchange BSE. 

Check out our article on Stock Market Basics

Which companies are a part of Nifty? 

For the latest stock performance, the Nifty index reconstitution happens every six months. It checks the 6-month performance of the stocks. It also checks if the companies fulfill the eligibility criteria. Following these criteria, it eliminates or adds stocks in the stock list, respectively. In case of any elimination or addition, the respective company is given a notice four weeks prior to reconstitution.

The NSE indices have an excellent team of professionals that manage the Nifty index. It is an advisory committee that offers guidance and expertise on issues that relate to equity indices.

The following is the eligibility criteria for companies for Nifty Index listing – 

  • The company must be registered with the National Stock Exchange. It must be an Indian company. 
  • The company’s stock must be highly liquid. The liquidity is measurable by the average impact cost. Impact cost is the trading price of single security in relation to the index’s weight to the company’s market capitalization. For six months, the company’s impact cost should be less than or equal to 0.50%. Otherwise, it should be lower with 90% of the observations made on a portfolio of Rs.10 crores. 
  • For the last six months, the company’s trading frequency should be 100%
  • The company should have a free-floating average market capitalization. This should be 1.5 times greater than the smallest company on the index.
  • Shares of the companies that have DVR or Differential Voting Rights can also be eligible for the Nifty 50 Index.

Apart from the periodical routine, the index also goes through a reconstitution when the company undergoes certain events—for instance, company events like spin-offs, mergers or acquisitions, suspensions or compulsory delisting. Additionally, Nifty conducts quarterly screening of the companies to keep track of whether they are adhering to regulations.

The companies must also adhere to specific mandates given by the Securities and Exchange Board of India (SEBI). Otherwise, the companies may be delisted from the indices. 

Nifty 50 Companies List June 2024

The following table lists the Nifty 50 companies:

Company NameSectorWeightage
Adani Enterprises Ltd.Metals & Minerals Trading0.84%
Adani Ports & Special Economic ZoneTransport Infrastructure0.69%
Apollo Hospitals Enterprise Ltd.Healthcare Services0.57%
Asian Paints LimitedConsumer Durables1.77%
Axis Bank Ltd.Banks3.13%
Bajaj Auto LimitedAutomobiles0.64%
Bajaj Finserv Ltd.Finance0.97%
Bajaj Finance Ltd.Finance2.29%
Bharti Airtel Ltd.Telecom – Services2.56%
Bharat Petroleum Corporation Ltd.Petroleum Products0.43%
Britannia Industries Ltd.Food Products0.68%
Cipla Ltd.Pharmaceuticals & Biotechnology0.62%
Coal India Ltd.Consumable Fuels0.62%
Divis Laboratories Ltd.Pharmaceuticals & Biotechnology0.54%
Dr Reddys Laboratories Ltd.Pharmaceuticals & Biotechnology0.67%
Eicher Motors Ltd.Automobiles0.62%
Grasim Industries Ltd.Cement & Cement Products0.78%
HCL Technologies Ltd.IT – Software1.49%
HDFC Bank LtdBanks13.77%
HDFC Life Insurance Company LimitedInsurance0.72%
Hero MotoCorp Ltd.Automobiles0.44%
Hindalco Industries Ltd.Non – Ferrous Metals0.73%
Hindustan Unilever Ltd.Diversified FMCG2.93%
ICICI Bank Ltd.Banks7.87%
Indusind Bank Ltd.Banks1.03%
Infosys LimitedIT – Software6.01%
ITC Ltd.Diversified FMCG4.55%
JSW Steel Ltd.Ferrous Metals0.81%
Kotak Mahindra Bank LimitedBanks3.04%
Larsen and Toubro Ltd.Construction3.84%
LTIMindtree LimitedIT – Software1.23%
Mahindra & Mahindra Ltd.Automobiles1.45%
Maruti Suzuki India LimitedAutomobiles1.53%
Nestle India Ltd.Food Products0.95%
NTPC LimitedPower1.02%
Oil & Natural Gas Corporation Ltd.Oil0.74%
Power Grid Corporation of India Ltd.Power0.98%
Reliance Industries Ltd.Petroleum Products9.56%
SBI Life Insurance Company Ltd.Insurance0.68%
State Bank of IndiaBanks2.77%
Sun Pharmaceutical Industries Ltd.Pharmaceuticals & Biotechnology1.30%
Tata Consultancy Services Ltd.IT – Software4.04%
Tata Consumer Products LimitedAgricultural Food & Other Products0.58%
Tata Motors Ltd.Automobiles1.14%
Tata Steel Ltd.Ferrous Metals1.05%
Tech Mahindra Ltd.IT – Software0.86%
Titan Company Ltd.Consumer Durables1.45%
UltraTech Cement LimitedCement & Cement Products1.12%
UPL Ltd.Fertilizers & Agrochemicals0.44%
Wipro Ltd.IT – Software0.74%

How is Nifty calculated?

Now that we understood what is Nifty 50 let’s look at its calculation. Nifty 50 indices calculation uses the float-adjusted and market capitalization method. Here, the level index demonstrates the aggregate market value of the stocks present in it for a specific duration. This particular base duration for the Nifty index is 3rd November 1995. Also, the base value of stocks is 1000, and the base capital is Rs.2.06 trillion

The formula for calculating the index value is as follows – 

Market capitalization = Price * Equity Capital

Free Float Market Capitalization = Price * Equity Capital * Investable Weight Factor

Index value = Current market value / (1000 * Base market capital)

Investable Weight Factor (IWF) is a factor to determine the number of shares available for trading. The index calculation is on a real-time basis as the value of stock also changes daily. 

The formula calculates not only the value but also the changes in the corporate procedures. For instance, changes in corporate can be stock splits, rights issues, and many more. Nifty share market is a benchmark for measurement against all equity shares markets in India. It regularly conducts index maintenance checks. Therefore, this ensures that it is stable and working effectively. This can persist as a benchmark index of the Indian stock market. 

How is Nifty different from Sensex? 

Nifty and Sensex both are Indian stock market indices which depict the strength of the securities markets. Despite their similarity to the broad-based index, there is a difference between Sensex and Nifty.


  • The nifty derivation is from the word National Fifty. It is also known as S&P CNX Nifty
  • Sensex derivation is from the phrase Sensitive Index. It is also known as the S&P BSE Index.

Date of Commencement

  • NSE Nifty incorporation year is 1992. However, it commencement of its operations was in November 1994. 
  • BSE Sensex incorporation year is 1986. 


  • Index and Services and Products Limited (IISL), an NSE India subsidiary owns and operates Nifty.
  • The Bombay Stock Exchange (BSE) owns Sensex. BSE is also the largest trading platform in India. 


  • Nifty is based on NSE. Its corporate office location is Exchange Plaza, Bandra Kurla Complex, Mumbai
  • Sensex is based on BSE. The corporate office location is at Dalal Street, Mumbai. 

Base Period

  • Nifty’s base period is 3rd November 1992
  • Sensex base period is 1978-1979


  • The nifty base value is 1000
  • Sensex base value is 100

Base Capital

  • Nifty base capital is Rs.2.06 trillion
  • Sensex does not have a base capital

Number of constituents

  • Nifty comprises the top 50 stocks traded on NSE
  • Sensex comprises the top 30 stocks traded on BSE.

Number of sectors

  • Nifty is a broad market index which covers companies across 24 sectors
  • Sensex covers companies across 13 sectors.


  • Nifty has 1600 companies listed
  • Sensex has 5000 companies listed.

As such, there is no significant difference between Sensex and Nifty. They both target the large cap stocks. Nifty is broader than Sensex as it has more number of large cap stocks listed. Also, Nifty has a more diversified portfolio in comparison to Sensex. One can even notice more trading happening on the NSE India platform.

Read more about the Differences Between Sensex and Nifty

What are the benefits of investing in the Nifty 50 Index?

There are different ways of buying Nifty 50 shares and thereby, investing in Nifty 50. A few of them are index funds, Nifty futures and options, and ETFs. One cannot directly invest in the index; instead, they have to buy all the Nifty 50 shares in the same proportion or invest in index funds and ETFs. Following are the benefits of investing in Nifty based index funds and ETFs:

  • Good returns in the long run: Nifty 50 was launched in 1996 with a base value of 1000. It reached the 15000 mark in 2021. Hence investing in index-based funds will provide good returns in the long run.
  • No bias by the fund manager: The index fund’s portfolio depends on the index directly, and the fund manager doesn’t have control over it. Hence it is free from fund manager bias.
  • Lower expense ratio: Index funds have a lower expense ratio when compared to other types of mutual funds. Since they are passive funds, the fund manager’s role is minimal, and hence the fund management fees are also low.
  • Market returns: The index funds offer market returns as they are a replica of the index. Their performance is directly dependent on the movement of the index. Hence it is easier to track investments.

What is Bank Nifty?

Bank Nifty is a stock market index that comprises of the largest and most liquid banking and financial stocks. As a sub-index of the Nifty 50, it was introduced on September 15, 2003. Bank Nifty tracks 12 prominent banking and financial stocks. Also, this index serves as a vital indicator of trends and movements within the banking sector. In other words, it offers insights into the overall health and trajectory of the banking industry within the Indian stock market. Its base value of 1000 originates from January 01, 2000.

What are the factors that cause changes in the Nifty?

Many factors influence the fluctuations in the Nifty. Global recessions can significantly impact the Nifty Index’s performance. Additionally, a rise in inflation tends to have a detrimental effect on the Nifty. This occurs due to higher borrowing costs for companies, impacting their expansion initiatives.

Moreover, higher inflation diminishes discretionary spending, reducing the consumer base for companies’ products and services. This decline in demand affects the overall performance of the Nifty Index.

Major Milestones of NIFTY?

Following are the major milestones of Nifty 50

  • 1993: NSE was recognized as a stock exchange.
  • 1996: The Nifty 50 index was launched with a base value of 1000. It is the flagship index of NSE.
  • 2000: Nifty touched 1800 due to IT-boom.
  • 2006: A service sector boom led to Nifty reaching 3000.
  • 2007: Nifty grew to 5000
  • 2014: After NDA has formed government at the centre, the nifty has touched 7,000.
  • 2017: Strong FII participation led to an increase in Nifty to 9,000.
  • 2017: GST rollout, good monsoon, and strong corporate earnings increased Nifty to 10,000.
  • 2018: Nifty touched the 11,000 mark due to a fall in crude oil prices and a positive update from the World Bank on the Indian economy.
  • 2021: Nifty touched the 15,000 mark due to COVID 19 vaccine rollout.

You may also like to read more about Nifty Bees

Frequently Asked Questions

What are the equity Market timings?

Usually, the equity market timings are from 9:15 am to 03:30 pm, Monday to Friday. However, the commodity market is between 10:00 AM to 11:30 PM, Monday to Friday.

Who manages the Nifty 50 Index?

Nifty 50 is the flagship index of the National Stock Exchange (NSE). It is managed by NSE Indices Ltd, a subsidiary of NSE. National Stock Exchanged is a leading exchange in India and ranks number 2 in the world due to the number of trades from January to December 2018. It is the first index to launch electronic or screen-based trading in India.
NSE Indices Limited, which is formerly known as IISL, is a subsidiary of NSE. Its core product is the index and offers various indexes and index-related services to capital markets. It not only owns and manages NIFTY 50 but the entire range of equity indices of NIFTY. For example, thematic indices, benchmark indices, sectoral indices, and strategy indices. The company also maintains fixed income indices based on government securities, money market securities, and corporate bonds

Who owns Nifty?

Nifty is a popular stock index introduced by the National Stock Exchange of India. The index is owned and managed by India Index Service & Products Limited (IISL). It was founded in 1992 while trading on Nifty was initiated in 1994. IISL is an Indian specialized company. It has an index as its focus product.

Which is better NSE or BSE?

NSE and BSE both are Indian stock market indices that depict the strength of the securities markets. They both target the large cap stocks. Nifty is broader than Sensex as it has more number of large cap stocks listed. Also, Nifty has a more diversified portfolio in comparison to Sensex. Therefore, NSE can be better for big investments considering the volume of trading while BSE can be more suitable for beginners.

Can I buy Nifty 50?

You cannot directly invest in the Nifty 50 index; instead, you can buy nifty 50 shares that comprise of all the 50 companies on the Index. You must buy the shares in the same proportion or invest in index funds and ETFs. There are a few other ways of investing in Nifty 50 such as index funds, Nifty futures and options, and ETFs.

What is Bank Nifty India?

Bank Nifty is an index representing the highest and most liquid 12 stocks from the banking sector that are trading on the National Stock Exchange. It acts as a benchmark that captures the capital market performance of Indian banking sector.

Can I buy on NSE and sell on BSE?

Yes, you can buy on NSE and sell those shares at any exchange as long as they are in your DEMAT account. You can only do so if you are an investor or a positional trader. However, if you’re an intraday or BTST trader, you must sell your shares at the same exchange where you purchased them from.

Is Nifty 50 a good investment?

There are different ways of investing in Nifty 50 and its main benefits are good returns from long-term investments. You can invest in index funds, Nifty futures and options, and ETFs. Though you cannot directly invest in the index instead you can buy all the 50 shares in the same proportion. You can enjoy a lower expense ratio and better market returns.

What is Nifty IT?

The Nifty IT Index is a sectoral index in the Indian stock market that tracks the Information Technology sector. The IT sector in India is among the largest in the country. The Nifty IT index comprises of the top 10 companies that belong to the IT sector in India.

What is the full form of Nifty?

Nifty is an abbreviation of the National Stock Exchange and Fifty.