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About NIFTY 500


The NIFTY 500 is an index representing the performance of the top 500 companies listed on the National Stock Exchange of India (NSE). It is a diversified index that includes companies from various sectors of the economy such as finance, technology, healthcare and manufacturing.

The index is calculated based on the free-float market capitalisation of its constituents. This means that it considers only the shares available for trading in the market and not those held by promoters, governments or other entities. The NIFTY 500 index provides a comprehensive and representative benchmark for the overall performance of the Indian stock market.

Investors and financial analysts often use the NIFTY 500 as a tool to monitor broader market trends and make investment decisions. It is part of the broader family of indices maintained by the NSE, including popular indices like the NIFTY 50 and the NIFTY Bank indices.


What is the NIFTY 500 Index?


The NIFTY 500 is India's first comprehensive index on the National Stock Exchange (NSE). Comprising 500 stocks, it is a diversified index determined by full market capitalisation and average daily turnover. The constituent stocks are taken from around 2,300 companies listed on the NSE. These stocks collectively cover 21 sectors of the economy with Financial Services at over 30%, followed by IT, oil, gas and consumable fuels, FMCG and automobile and auto components. Together, these leading sectors account for a combined weightage of 67%.

The NIFTY 500 index includes almost 96.1% of the float-adjusted market capitalisation on the NSE. The NIFTY 500 stocks are categorised into 72 industry indices, mirroring comparable index weights to their market counterparts. The index includes two variants: the NIFTY 500 Total Returns Index and the NIFTY 500 Industry Indices. This index is used for introducing index funds, ETFs and structured products, and serves as a benchmark for evaluating fund portfolios.


Sector-Wise Representation


The NIFTY 500 index has a diverse representation across various sectors. As the year 2023 ended, the financial services sector led the index with 30.01% weightage. Following closely was the information technology sector, contributing 10.20%.

The oil, gas and consumable fuels sector held an 8.53% weightage. The fast-moving consumer goods sector contributed 7.93% and the automobile and auto components sector stood at 6.40%.

Other sectors with noteworthy contributions included healthcare at 5.45%, capital goods at 4.84%, consumer durables at 3.50% and power at 3.41%. The metals and mining, construction and consumer services sectors also had significant contributions at 3.40%, 3.13% and 2.80% respectively.


History


The NIFTY 500 index was introduced with a base date of January 1, 1995, and a base value of 1,000. Since its inception, the share price of the NIFTY 500 has surpassed 13,000 levels at a P/E multiple of 20.05. It undergoes rebalancing semi-annually.

The NIFTY 500 index is owned and managed by NSE Indices Limited, formerly known as India Index Services and Products Limited.
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