Meaning of Nifty 50
The NIFTY 50 Index is a well-diversified portfolio of 50 of India’s largest and most liquid companies on the National Stock Exchange (NSE). These 50 companies in the Nifty 50 capture 66.8% of the float-adjusted market capitalization from a universe of 1,600+ companies that are listed on the NSE. The market capitalization of Nifty 50 stocks on May 7, 2019 was ₹83,07,175 crores (or USD 1.18 trillion).
The Nifty 50 was launched on April 22, 1996 with 50 stocks. The Index is used for benchmarking fund portfolios, launching index funds and index-based derivatives. Since inception, the Nifty 50 index has delivered annual price returns of 11.05% and annual total returns of 13.04%.
Companies in Nifty 50
The Nifty 50 Index is reconstituted twice a year based on the last six months data ending January and July. In the last update earlier this year (Feb 2019), Britannia Industries entered into Nifty 50 by replacing Hindustan Petroleum Corporation Ltd. HPCL moves to Nifty Next 50.
The companies forming the Nifty 50 in May 2019 are available in the table below.
Sectoral Distribution of Nifty 50 companies
One can say that the Nifty 50 is a true reflection of the state of the general economy as it covers the major sectors of the Indian economy. India’s market capitalization is USD 2.12 trillion (which is bigger than Germany – Europe’s biggest economy) of which the Nifty 50 constitutes over half. The Nifty 50 includes leading Indian companies in Reliance Industries, Infosys, HDFC Bank, Maruti Suzuki, Coal India and others.
As of May 2019, the Nifty 50 composition of sectors is –
- Financial Services (11 companies; 22% of Nifty 50 stocks)
- Energy (7 companies; 14% of Nifty 50 stocks)
- Automobile (6 companies; 12% of Nifty 50 stocks)
- Consumer Goods (5 companies)
- Information Technology (5 companies)
- Metals (5 companies)
- Pharma (3 companies)
- Telecom (2 companies)
- Cement (2 companies)
- Construction (1 company in Nifty 50)
- Fertilizers (1 company in Nifty 50)
- Services (1 company in Nifty 50)
- Media (1 company in Nifty 50)
The composition from a % of market capitalization shows a skewness towards financial services companies where 22% of companies representing the financial sector hold over 37% of the Nifty 50 capitalization. Other notable sectors are Energy, IT and Consumer Goods.
Market Capitalization of Nifty 50 stocks
Note that the market capitalization used here is the free-float market capitalization and not the total market capitalization which is based on all outstanding shares. Read about the difference between free float and total market capitalization by clicking on the article below.
Related article: What is free-float market capitalization?