The NIFTY 50 is perhaps the most widely followed stock market index in India. NIFTY stands for National Stock Exchange Fifty.
The NIFTY 50 is the flagship index on the National Stock Exchange of India Ltd. (NSE), owned and managed by NSE Indices Limited. It’s a well-diversified 50 Indian listed company’s index reflecting overall market conditions.
NIFTY 50 Index is computed using free float market capitalization method.
As on March 29, 2019, NIFTY 50 represents 67% of the total free float market capitalization of all listed equity companies on NSE. It helps investors to gauge the pulse of Indian capital market.
What is free float market capitalization used in NIFTY 50?
Before getting into free float market capitalization, you need to understand the term market capitalization.
Market capitalization is the measure of a company’s outstanding shares multiplied by the price of each share.
For instance, a company with 1, 00,000 outstanding shares at Rs. 10 each will have a market cap of Rs. 10 lakhs. The size of market capitalization for a company enables its categorization into small-cap, mid-cap and large-cap classes.
However, free-float market capitalization is a different concept altogether.
In market capitalization calculation, we take total outstanding shares which include both public and privately owned shares. In free-float market capitalization method, the value is calculated only on the outstanding shares held publicly. This means privately owned shares are excluded.
Therefore, value of a free-float market capitalization would always be lower than the actual market capitalization.
In free float market capitalization, the value of the company is calculated by excluding shares held by the promoters. These excluded shares are the free float shares.
For example if a company has issued 10 Lakh shares of face value Rs 10, but of these, four Lakh shares is owned by the promoter, then the free float market capitalization is Rs 60 Lakh.
The 50 Indian listed companies in Nifty 50 are;
|SI. No.||Company Name||Industry||Symbol|
|1||Adani Ports and Special Economic Zone Ltd.||SERVICES||ADANIPORTS|
|2||Asian Paints Ltd.||CONSUMER GOODS||ASIANPAINT|
|3||Axis Bank Ltd.||FINANCIAL SERVICES||AXISBANK|
|4||Bajaj Auto Ltd.||AUTOMOBILE||BAJAJ-AUTO|
|5||Bajaj Finance Ltd.||FINANCIAL SERVICES||BAJFINANCE|
|6||Bajaj Finserv Ltd.||FINANCIAL SERVICES||BAJAJFINSV|
|7||Bharat Petroleum Corporation Ltd.||OIL & GAS||BPCL|
|8||Bharti Airtel Ltd.||TELECOM||BHARTIARTL|
|9||Britannia Industries Ltd.||CONSUMER GOODS||BRITANNIA|
|11||Coal India Ltd.||METALS||COALINDIA|
|12||Divi’s Laboratories Ltd.||PHARMA||DIVISLAB|
|13||Dr. Reddy’s Laboratories Ltd.||PHARMA||DRREDDY|
|14||Eicher Motors Ltd.||AUTOMOBILE||EICHERMOT|
|15||Grasim Industries Ltd.||CEMENT & CEMENT PRODUCTS||GRASIM|
|16||HCL Technologies Ltd.||IT||HCLTECH|
|17||HDFC Bank Ltd.||FINANCIAL SERVICES||HDFCBANK|
|18||HDFC Life Insurance Company Ltd.||FINANCIAL SERVICES||HDFCLIFE|
|19||Hero MotoCorp Ltd.||AUTOMOBILE||HEROMOTOCO|
|20||Hindalco Industries Ltd.||METALS||HINDALCO|
|21||Hindustan Unilever Ltd.||CONSUMER GOODS||HINDUNILVR|
|22||Housing Development Finance Corporation Ltd.||FINANCIAL SERVICES||HDFC|
|23||ICICI Bank Ltd.||FINANCIAL SERVICES||ICICIBANK|
|24||ITC Ltd.||CONSUMER GOODS||ITC|
|25||Indian Oil Corporation Ltd.||OIL & GAS||IOC|
|26||IndusInd Bank Ltd.||FINANCIAL SERVICES||INDUSINDBK|
|28||JSW Steel Ltd.||METALS||JSWSTEEL|
|29||Kotak Mahindra Bank Ltd.||FINANCIAL SERVICES||KOTAKBANK|
|30||Larsen & Toubro Ltd.||CONSTRUCTION||LT|
|31||Mahindra & Mahindra Ltd.||AUTOMOBILE||M&M|
|32||Maruti Suzuki India Ltd.||AUTOMOBILE||MARUTI|
|34||Nestle India Ltd.||CONSUMER GOODS||NESTLEIND|
|35||Oil & Natural Gas Corporation Ltd.||OIL & GAS||ONGC|
|36||Power Grid Corporation of India Ltd.||POWER||POWERGRID|
|37||Reliance Industries Ltd.||OIL & GAS||RELIANCE|
|38||SBI Life Insurance Company Ltd.||FINANCIAL SERVICES||SBILIFE|
|39||Shree Cement Ltd.||CEMENT & CEMENT PRODUCTS||SHREECEM|
|40||State Bank of India||FINANCIAL SERVICES||SBIN|
|41||Sun Pharmaceutical Industries Ltd.||PHARMA||SUNPHARMA|
|42||Tata Consultancy Services Ltd.||IT||TCS|
|43||Tata Consumer Products Ltd.||CONSUMER GOODS||TATACONSUM|
|44||Tata Motors Ltd.||AUTOMOBILE||TATAMOTORS|
|45||Tata Steel Ltd.||METALS||TATASTEEL|
|46||Tech Mahindra Ltd.||IT||TECHM|
|47||Titan Company Ltd.||CONSUMER GOODS||TITAN|
|48||UPL Ltd.||FERTILISERS & PESTICIDES||UPL|
|49||UltraTech Cement Ltd.||CEMENT & CEMENT PRODUCTS||ULTRACEMCO|
Sector Exposure of NIFTY 50
|Sector Exposure||NIFTY 50 (%)||All listed equity stocks on NSE (%)|
Top constituents by weightage
|Company’s Name||Weight on NIFTY 50 (%)|
|Reliance Industries Ltd||10.01|
|HDFC Bank Ltd.||9.59|
|Housing Development Finance Corporation||6.55|
|ICICI Bank Ltd.||6.41|
|Tata Consultancy Services Ltd.||5.08|
|Kotak Mahindra Bank Ltd.||3.67|
|Hindustan Unilever Ltd.||3.24|
|Axis Bank Ltd.||2.83|
|Larsen & Toubro Ltd.||2.66|
Index is re-balanced on semi-annual basis. The cut-off date is January 31 and July 31 of each year, i.e. For semi-annual review of indices, average data for six months ending the cut-off date is considered. Four weeks prior notice is given to market from the date of change.
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