What is NIFTY?
NIFTY is a market index introduced by the National Stock Exchange. It is a blended word – National Stock Exchange and Fifty coined by NSE on 21st April 1996. NIFTY 50 is a benchmark based index and also the flagship of NSE, which showcases the top 50 equity stocks traded in the stock exchange out of a total of 1600 stocks.
These stocks span across 12 sectors of the Indian economy which include – information technology, financial services, consumer goods, entertainment and media, financial services, metals, pharmaceuticals, telecommunications, cement and its products, automobiles, pesticides and fertilizers, energy, and other services.
NIFTY is one of the two national indices, the other being SENSEX, a product of the Bombay Stock Exchange. It is owned by the India Index Services and Products (IISL), which is a fully-owned subsidiary of the National Stock Exchange Strategic Investment Corporation Limited.
NIFTY 50 follows the trends and patterns of blue-chip companies, i.e. the most liquid and largest Indian securities.
NIFTY contains a host of indices – NIFTY 50, NIFTY IT, NIFTY Bank, and NIFTY Next 50; and is a part of the Futures and Options (F&O) segment of NSE which deals in derivatives.
Eligibility Criteria for NIFTY Index Listing?
The eligibility criteria for getting listed on the NIFTY Index are mentioned below –
The NIFTY Index is reconstituted every six months and considers the performance of a stock over such period. Depending on this performance, and given that a company and its stock fulfils all the eligibility criteria mentioned above, the list might include or eliminate new/old stocks respectively. In case any new additions and eliminations are done, the companies in question are informed through a notice four weeks before reconstitution.
Apart from a periodical routine, reconstitution can also be undertaken in case a company goes through a scheme of arrangements for events involving suspension, spin-off, merger and compulsory delisting.
Other than these, NIFTY share market is supposed to conduct a quarterly screening of companies to check their adherence to portfolio concentration regulations for Index Funds and ETFs as per SEBI mandate as announced on 10th January 2019.
Discalimer!
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