What Is NIFTY?


Nifty is an equity benchmark index in India introduced by the National Stock Exchange on April 21, 1996. Since then, it has risen 13x from 835 to 10,800. Other Nifty indices were established later in the same year.


Index Of Indexes

Nifty50 was the first index to be established, and Nifty LargeMidcap 250 is the newest. It has a lot of other indices that cover the broader markets, namely NIFTY Junior, NIFTY 100, NIFTY 500, NIFTY MIDCAP 100, NIFTY SMALLCAP 100, NIFTY FREE FLOAT SMALLCAP 100.

The Nifty indices includes stocks like Asian Paints, Bajaj Auto, Dr. Reddy's Laboratories, Eicher Motors, HDFC Bank, ITC Limited, Tech Mahindra, Wipro and others. The indices may also replace non-performing stocks as and when required. Recently, Nifty50 excluded Ambuja Cements, Aurobindo Pharma, and Bosch and included Bajaj Finserv, Grasim Industries, and Titan.


A glance At Nifty Indices

Nifty Mid cap 100 includes Berger Paints India, Edelweiss Financial Services, Jubilant Foodworks, PI Industries, and Tata Global Beverages. NIFTY Large Mid cap 100 includes stocks like Infosys, Reliance industries, Maruti Suzuki and ITC. Retail investors generally invest in the mid cap and large cap indices.

Nifty even has sectoral indices such as Nifty Auto, Bank Nifty, Nifty Fin services, Nifty IT and more. The performance of the sector can be compared with the performance of the sectoral indices to gauge overall growth.


How Is It Calculated?

The NSE Nifty50, akin to the BSE Sensex, is calculated using the free float market capitalization method, i.e. multiplying the shares of a company available for trading by its current price. The resultant value is the free float market capitalization of the company.