Nifty 500

The Nifty 500 Index is India’s first broad-based stock market index, designed to capture the performance of the top 500 companies listed on the National Stock Exchange (NSE). Representing approximately 96% of the market's free-float capitalization, the index provides a comprehensive overview of the Indian economy across 72 industry sectors. The Nifty 500 is calculated using a free-float market capitalization-weighted methodology, ensuring that each company's weight in the index reflects its market value based on publicly traded shares. 

This index serves as a vital benchmark for fund managers, investors, and financial product developers, offering diversification across large, mid, and small-cap companies. Regular reviews and rebalancing keep the index aligned with market trends, making it an essential tool for portfolio management and the creation of financial products like ETFs and index funds. The Nifty 500 has become a cornerstone of the Indian financial market, reflecting the evolving landscape of the nation's economy.
 

The NIFTY 500 index is India’s first broad-based stock market index, comprising the top 500 listed companies on the National Stock Exchange (NSE). It represents approximately 96.1% of the free float market capitalization and 96.5% of the total turnover on the NSE. The index is divided into 72 industry indices, with industry weights reflecting their representation in the overall market. 

For instance, if banking stocks make up 5% of the market, they would also constitute around 5% of the NIFTY 500. The index is widely used for benchmarking fund portfolios, and launching index funds, ETFs, and other financial products.
 

The NIFTY 500 Index is calculated using the free-float market capitalization method, which means the index level reflects the total market value of all the stocks in the index based on the shares that are available for public trading. Unlike full market capitalization, which includes all outstanding shares, free-float market capitalization only considers shares that can be freely traded on the market, excluding those held by promoters, governments, or other restricted categories.

This method ensures that the index accurately represents the investable portion of the market, giving a more realistic view of the market's performance. The index level is determined by comparing the current total free-float market value of the index's constituent stocks to a specific base period. This approach helps in capturing the market dynamics and provides a relevant benchmark for investors looking to track the broader Indian stock market.
 

Eligibility Criteria for Selection of Constituent Stocks in the Nifty 500 Index:

●    Only equity shares listed on the NSE are eligible. Convertible stocks, bonds, warrants, rights, and preferred stocks with fixed returns are excluded.
●    Companies must be within the top 800 based on both average daily turnover and full market capitalization over the previous six months.
●    Companies must have traded on at least 90% of the days during the previous six-month period.
●    Companies are included if their rank based on full market capitalization is within the top 350.
●    Companies are included if their full market capitalization is at least 1.50 times that of the smallest constituent in the Nifty 500.
●    Companies are excluded if their rank based on full market capitalization falls below 800.
●    A minimum listing history of 1 month as of the cutoff date is required for inclusion.
 

The Nifty 500 Index is designed to capture the performance of the top 500 companies listed on the National Stock Exchange (NSE), representing a broad spectrum of the Indian stock market. The index uses a free-float market capitalization-weighted methodology, meaning that each company's weight in the index is determined by the value of its shares available for public trading. This approach ensures that the index reflects the market value of its constituent stocks accurately.

To maintain its relevance, the Nifty 500 undergoes regular reviews, with companies added or removed based on specific criteria, such as market capitalization, trading frequency, and overall market representation. The index is divided into 72 industry sectors, and the weight of each industry in the index mirrors its weight in the overall market. This structure allows the Nifty 500 to serve as a comprehensive benchmark for the Indian stock market, making it useful for benchmarking fund portfolios and launching financial products like ETFs and index funds.
 

Investing in the Nifty 500 Index offers several advantages, particularly for those seeking broad exposure to the Indian stock market. The index includes the top 500 companies listed on the National Stock Exchange (NSE), covering about 96% of the market's free-float capitalization. This extensive coverage provides diversification across various sectors and industries, reducing the risk associated with investing in individual stocks.

The Nifty 500 is a balanced index, representing large, mid, and small-cap companies, allowing investors to benefit from the stability of established firms while capturing the growth potential of emerging companies. Additionally, the index is regularly reviewed and updated to ensure it reflects the most relevant companies in the market, keeping it aligned with current economic conditions. As a result, the Nifty 500 is an effective benchmark for portfolio management and a reliable tool for launching ETFs, index funds, and other structured financial products.
 

The Nifty 500 Index was introduced by the National Stock Exchange (NSE) to provide a comprehensive benchmark that captures the broad performance of the Indian stock market. The Nifty 500 was designed to include the top 500 companies listed on the NSE, representing a significant portion of the market's total capitalization. The index was created to offer investors a broad-based view of the Indian economy, covering a diverse range of sectors and industries.

Over the years, the Nifty 500 has evolved to reflect the changing dynamics of the Indian market. It has become a key benchmark for fund managers, investors, and financial product developers. The index is regularly reviewed and rebalanced to ensure it remains representative of the most relevant and liquid stocks in the market. Today, the Nifty 500 serves as a vital tool for assessing the overall health and performance of the Indian stock market, making it an essential component of the country's financial landscape.
 

To invest in Nifty 500 stocks, start by opening a Demat and trading account. Research the 500 companies listed in the Nifty 500 Index and select the stocks you wish to invest in. Place buy orders through your trading account, and monitor your investments regularly to stay informed about market trends.
 

Nifty 500 stocks are the top 500 companies listed on the National Stock Exchange (NSE), representing a broad cross-section of the Indian economy. These stocks span various sectors and include large, mid, and small-cap companies, making the Nifty 500 Index a comprehensive benchmark for the Indian stock market.
 

Yes, you can trade shares of companies listed in the Nifty 500 Index. These stocks are actively traded on the National Stock Exchange (NSE), allowing you to buy and sell them during market hours through a Demat and trading account, just like any other listed stocks on the exchange.
 

The Nifty 500 Index uses 1995 as the base year and was launched by the National Stock Exchange (NSE) to provide a comprehensive benchmark for the Indian stock market, covering the top 500 companies.
 

Yes, you can buy shares of companies listed in the Nifty 500 Index and sell them the next day. It can be done through a Demat and trading account during market hours.