Nifty 50 Companies List

Nifty 50 index is a well-diversified index of 50 companies from 14 sectors of the economy. These stocks are considered to be the barometers of the economy and are market leaders in their own sectors. Nifty 50 is also known as nifty.

The Nifty 50 Index is managed by the National Stock Exchange of India (NSE) and represents the performance of the 50 largest and most liquid companies on the NSE. It is a key benchmark for the Indian stock market, widely used for investment and portfolio analysis.

Nifty 50 can be used for a variety of purposes such as benchmarking fund portfolios, launching of index funds, ETFs and structured products.

The selection of stocks for the Nifty 50 index on the National Stock Exchange of India (NSE) is based on specific criteria established by the NSE. Here's a simplified overview of the selection process:

1. Market Capitalization: Stocks considered for inclusion must have a minimum market capitalization. This threshold can vary and is periodically reviewed. For inclusion in the Nifty, the float adjusted market capitalization of the particular company should be at least 1.5 times the average free-float market capitalization of the present smallest index component.
2. Liquidity: Stocks must meet specific liquidity criteria, including average daily trading volumes and turnover ratios
3. Sector Representation: The index aims to represent various sectors of the Indian economy, so stocks are selected from diverse industries.
4. Free Float: The index is based on free-float market capitalization, which means that only the publicly tradable companies are considered for inclusion.
5. Regular Review: The index is periodically reviewed and stocks may be added or removed based on changes in market conditions, market capitalization and liquidity.

The NSE's Index Maintenance Sub-Committee is responsible for implementing these criteria and managing changes to the Nifty 50 index's constituents. The objective is to ensure that the index accurately reflects the performance of the largest and most liquid companies in the Indian stock market.

Nifty is computed using the free float adjustment methodology. The initial index value is set to a specific base value (e.g., 1,000) for ease of reference.

Market capitalization = Share Price x Number of shares.

Free Float Market Capitalization = Share Price x Shares Outstanding * IWF.

Index Value = Current Market Value / Base Index Value.

*IWF or Investible Weight factor = (Shares Outstanding – Locked-in Shares)/ Shares Outstanding.

Base Index Value = Base Market Capital * 1000.

Base Market capital = The average market price of a group of securities at a specific time. Used for the purpose of indexing.

The index value is computed on a real-time basis every day.

You can invest in the Nifty 50 in many ways and your choice will depend on your investment preferences and goals. Here are some common methods:

• Direct Investment in Nifty 50 Stocks: You can buy individual stocks of the companies that are part of the Nifty 50 index through a brokerage account. This allows you to have direct ownership of specific companies within the index. Moneyworks4me helps you simplify Nifty 50 stock investments with our Nifty 50 AlphaCase.
• Exchange-Traded Funds (ETFs): Nifty 50 ETFs are investment funds that aim to replicate the performance of the Nifty 50 index. By buying shares of a Nifty 50 ETF, you can get exposure to the entire index. ETFs are traded on stock exchanges, and you can buy and sell them like stocks.
• Index Mutual Funds: Similar to ETFs, there are mutual funds that track the Nifty 50 index. You can invest in these funds through various mutual fund Platforms.

Nifty ETF have higher liquidity and slightly lower fees as compared to the Nifty 50 Index Funds making them better investment choice.

It is generally agreed that a Nifty PE ratio of less than 18 means an undervalued market and a time to invest more. However this cannot be predicted and changes dynamically. So, we have found that investing in index funds in a disciplined manner through monthly SIPs and investing lumpsum amounts on every correction will improve your returns. To know our recent views on the market read our monthly MW4Me Outlook.

Here are a few Nifty 50 Index Funds that have been well-regarded historically;

• ICICI Prudential Nifty 50 Index Fund: ICICI Prudential is a well-known asset management company in India and their Nifty 50 Index Fund has been popular among investors.
• UTI Nifty Index Fund: UTI AMC is another reputable fund house and this fund aims to replicate the performance of the Nifty 50.
• HDFC Index Fund - Nifty 50 Plan: HDFC is a leading mutual fund provider in India and this fund seeks to mimic the Nifty 50's performance.
• SBI Nifty Index Fund: State Bank of India's mutual fund offers an index fund that tracks the Nifty 50.
• Nippon India ETF Nifty BeES: While this is an exchange-traded fund (ETF) rather than a mutual fund, it's another option for tracking the Nifty 50 and is known for its liquidity.

Not all stocks in the Nifty 50 index are Blue chips. As stocks are selected in the index using an algorithm, often stocks that are most popular make their way into the index. Some of these companies might lack traits of Blue-chip stocks like dependable earnings, stable dividends and industry leaders.

Investment in Nifty 50 stocks should be with an aim to build your Core portfolio – a portfolio that is held for the long term and form the backbone of your investments. It is best built of industry leaders and highly efficient companies with low impact from an economic slowdown, competition or governance issues. They are also less volatile, i.e. lower corrections and quicker return to fair prices. This consistency in return will help you stay invested in the equity market.

Not all Nifty 50 stocks fit this bill and just selective investment is warranted. For details read, ‘ Building a Portfolio with Core and Booster Stocks ’.

How to invest in Nifty 50 stocks? The investment approach most suited for Retail investors, is investing in Quality-at-Reasonable-Price. This enables them to stay invested and let compounding do its magic. The best Nifty 50 stocks are usually expensive and very expensive. Investing at very high prices leads to the risk of mediocre returns and steep correction in portfolio worth and eventually exit. But they are available at reasonable prices in a bear market and times of specific temporary setbacks. On such occasions knowing the fair value of the Nifty 50 stocks enables you to invest in them confidently.

Read our blog to know more.

You can use different criterias to arrive at the list of best stocks in the Nifty 50 company index. You can use return ratios like ROCE or ROE, that will help you choose companies with profitable growth.

Based on ROE, the best stocks in the Nifty 50 companies index are:

Based on the past year's gain, the best performing stocks are:

Stocks with the highest revenue growth in the past 5 years is:

Stocks with high profit growth often witness their stock prices gaining, irrespective of the market movements.

Stocks with the highest profit growth in the past 5 years is:

The Nifty 50 index represents 50 different companies that reflect the Indian equity market in a broad sense. There are 50 different companies that are from 14 different sectors.

• Diversification – It deploys the investment in multiple companies and sectors thereby reducing risk compared to investing in a single or small set of companies. Over time Nifty 50 replaces the underperforming companies at a market level with performing one.
• Wide market presence – Nifty 50 Index funds are quite popular in India and have a substantial market presence.
• Low cost - These funds have lower operating expenses as fund managers simply need to replicate the index.
• Inflation + returns - Index funds have consistently generated inflation beating returns over the long term. Coupled with low costs it becomes excellent value for investors.