NIFTY Abbreviation

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Popular abbreviations of NIFTY:

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What does NIFTY mean?

NIFTY is the short form for National Fifty or National Stock Index Fifty. It is commonly known as NIFTY 50, a benchmark index in the Indian stock market established by the National Stock Exchange. It represents the weighted average of India’s 50 largest companies listed on the National Stock Exchange.

It shows the top 50 equity stocks out of the total 1600 stocks represented on the NSE. It is one of two major national stock indices, with the other index being SENSEX maintained by the Bombay Stock Exchange. The Index was established on 21st April 1997 and is currently owned and managed by NSE Indices, a subsidiary of NSE Strategic Investment Corporation Limited.

Constituents sectors

The NIFTY stocks cover 12 sectors of the Indian economy. These are Energy, Pesticides and Fertilisers, Automobiles, Cement and products, Telecommunications, Pharmaceuticals, Metals, Financial services, Consumer goods, Infrastructure, Healthcare, Construction, Information technology and Banking. Apart from NIFTY 50, there are several other indices under NIFTY namely NIFTY Bank, NIFTY IT and NIFTY Next 50.

Appearing on the NIFTY index

For appearing on the NIFTY index, a company needs to fulfill the following eligibility criteria:

• The company must be based and registered in India and should be registered with National Stock Exchange.
• The stocks for the company should be highly liquid in nature, measured on the basis of their average impact cost.
• For the previous six months, the company should have a trading frequency of 100%.
• The free-floating market capitalization of the company should be 1.5 times higher than the lowers constituent of the index.
• A company that has Differential Voting Rights are also eligible for listing on the NIFTY 50 index.

Calculation of the NIFTY index

The NIFTY 50 index is calculated by the people at NSE Indices Limited and used market capitalization and a free-floated adjusted method for calculation. The index value is found by using the formula:

Index value = Current market value / (1000 * Base market capital)

Revisions in the NIFTY index are done every six months considering the performance of every stock listed on the index. If the stock fulfills the eligibility criteria, it can be included in the list again.