Nifty 50
The NSE's benchmark index of 50 large Indian companies, weighted by free-float market capitalisation.
Formula
Index Value = (Current Free-Float Market Capitalisation of Constituents / Base Market Capitalisation) x Base Value
Unit
index points
In depth
Constituents are selected on free-float market capitalisation and liquidity, with impact cost as an explicit criterion — a stock too costly to trade in size cannot enter regardless of its market capitalisation. The index is reviewed semi-annually with advance notice, which is what creates the index inclusion effect. Free-float weighting means the largest few constituents carry a disproportionate share of the index, so the Nifty can rise while most of its members fall. Its base is 1,000 as of 3 November 1995, which is why the level itself is a ratio to that date rather than a meaningful number.
Worked example
If the top five constituents carry 38% of the weight, a 10% rise in those five lifts the index 3.8% on its own. The other forty-five could fall on average and the index would still close higher.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Nifty 50” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.