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What is NIFTY ? Each and everything about NIFTY

What is NIFTY ?  Each and everything about NIFTY
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Get to know Each and everything about NIFTY

Nifty stands for National Stock Exchange Fifty. It is thus the broad index of NSE and it is related with the equity market dealings. NSE or one can say the National Stock Exchange in India, is the leader in the market of stock exchange. Sometimes Nifty is also called by the name Nifty 50 and CNX Nifty. Nifty was earlier famous by the name Nifty 50 because it comprised of the stocks of 50 companies but in the present time there is a total of 51 stocks in its basket. Talking about the ownership as well as management of Nifty everything in this regard is done by the IISIL that stands for India Index Services and Products Ltd.

The criteria for inclusion of companies under NIFTY

There are various criteria on the basis of which companies are included in Nifty and these are liquidity, float adjustment and domicile. For liquidity the trading in stocks should have been for an average impact cost of 0.5% or less during the previous half year and this applies to 90% of the observations for that portfolio where the amount is rupees 2 crores. For floating criteria the organizations should have at least double the float adjusted market capitalization. The domicile requirement is that the company must have domicile status of India for trading in NSE.

The list of 51 companies whose stocks are currently traded in NIFTY

The 51 companies are ACC ltd, Adani Ports, Abuja Cements Ltd, Asian Paints Ltd, Aurobindo Pharma Ltd, Axis Bank Ltd, Bajaj Auto Ltd, Bank Of Baroda, Bharat Heavy Electricals, Bharat Petroleum Corporation, Bharti Airtel Limited, Bharti Infratel Ltd, Bosch Ltd, Cipla Ltd, Coal India Ltd, Dr Reddy’s Laboratories Ltd, Eicher Motors Ltd, GAIL, Grasim Industries Ltd, HCL Technologies Ltd, HDFC  Bank Ltd, Hero Motocorp Ltd, Hindalco Industries Ltd, Hindustan Unilever Ltd, Housing Development Finance Corporation Ltd, ITC Limited, ICICI Bank Ltd, Idea Cellular Ltd, Indusind Bank Ltd, Infosys Ltd, Kotak Mahindra Bank, Larsen And Toubro, Lupin Ltd, Mahindra And Mahindra, Maruti Suzuki India, NTPC Ltd, ONGC, Power Grid Corporation, Reliance Industries Ltd, State Bank Of India, , Sun Pharmaceutical Industries, Tata Consultancy Services, Tata Motors DVR, Tata Motors Ltd, Tata Power Co., Tata Steel Ltd, Tech Mahindra Ltd, Ultra Tech Cement Ltd, Wipro, Yes Bank and Zee Entertainment Enterprises

Calculation of NIFTY

Calculation of Nifty is done using free float market capitalization method where the weights are assigned. The index level depicts the complete value related to all the stocks in the market that is relative to the base period. Market capitalization is calculated by multiplying equity capital with price and if this final value is multiplied with investible weight factor then it results in free float market capitalization. The base value for such index is 1000 and the capital is rupees 2.06 trillion. November 3rd  1995  is the base period for Nifty index.

The process of obtaining final value

The final Nifty value is obtained when the current market value is divided by the base market capital and the resultant is multiplied with base index value. Whenever there is any change in the value of scrip, the index is to be calculated on daily basis for real time settlements.