Nifty 50 Share Price

About Nifty 50

The NIFTY 50, formerly known as CNX NIFTY, is India’s flagship index on the National Stock Exchange (NSE) that reflects the pulse of the equities market. NIFTY 50 is an abbreviation of the ‘National Stock Exchange Fifty’. It is a diversified float-adjusted market-capitalisation-weighted index of 50 blue chip companies spanning different sectors of the economy. 

NIFTY 50 is computed in four currencies: the Indian Rupee (INR), Australian Dollar (AUD), US Dollar (USD) and Canadian Dollar (CAD). It is reconstituted semi-annually, where in a calendar year, a maximum of 10% of the total number of companies in the index (five companies) can be added/removed. This ensures that it continues to reflect the changing dynamics of the Indian economy and its financial markets.

NIFTY 50 USD, NIFTY 50 Total Returns Index and NIFTY 50 Dividend Points Index are some of the variants of the NIFTY 50 index. This index is ideal for derivatives trading. It is also used for benchmarking fund portfolios and index funds.

As of September 30, 2022, the NIFTY 50 index captures almost 62% of the float-adjusted market capitalisation of NSE stocks.

What is the Stock Selection Process for the NIFTY 50?

The NIFTY 50 share price is determined by the underlying weighted average of 50 stocks on the basis of free-float market capitalisation. Free float refers to the shares which are readily available to the public for trading and are not held by promoters.

These stocks are chosen from the universe of NIFTY 100 and need to meet the following eligibility criteria:

1. Should be an Indian company registered with the NSE
2. Should be highly liquid, which means its average impact cost should be less than or equal to 0.50% for 90% of the observations for a basket size of ₹10 crore in the past 6 months
3. Should have 100% trading frequency in the past 6 months
4. Should have a free-floating average market capitalisation which is at least 1.5 times greater than the smallest constituent on the index
5. Should have derivative contracts available on NSE

Even companies that issue shares with Differential Voting Rights are eligible to be included in the NIFTY 50 index.

How Is NIFTY 50 Value Calculated?

The Nifty 50 index value is calculated as follows:

Index value = Current market value / (Base Market Capital * Base Index Value)

The formula also takes corporate actions such as mergers, de-listing, restructuring, and spin-offs into consideration. The NIFTY 50 index is reviewed semi-annually based on 6 months’ data ending January and July. The replacement of stocks in NIFTY 50 (if any) is implemented from the last trading day of March and September.