Nifty 100

What is the Nifty 100?

The Nifty 100 is an important stock market index introduced and managed by the National Stock Exchange (NSE) of India. It is an overarching benchmark, reflecting the performance of the top 100 largest and most liquid companies listed on NSE. The Nifty 100 is composed of both the Nifty 50 and Nifty Next 50 indices, providing investors like you with exposure to a diversified set of India's top blue-chip stocks from a wide range of sectors including banking, information technology, energy, consumer goods, pharmaceuticals, and more. The index is designed to reflect the overall health, sentiment, and trends of the Indian equity market, making it a useful tool for institutional investors, mutual funds, portfolio managers, and retail investors.

The Nifty 100 is widely regarded as an indicator of the Indian economy’s performance, as its constituent companies are among the most significant contributors to GDP and employment. The index is constructed using a free-float market capitalisation weighted methodology, ensuring that only shares available for public trading are considered in its calculation. Regular reviews and rebalancing of the index ensure that it remains relevant and accurately represents the evolving Indian corporate landscape.

Nifty 100 stocks selection criteria

The selection criteria for inclusion in the Nifty 100 index are designed to maintain the index’s integrity, liquidity, and relevance as a benchmark for India’s large-cap segment. To qualify, a company must be listed on the National Stock Exchange and be among the top 100 companies by full market capitalisation, ensuring only the most impactful stocks are included.

The process begins with the Nifty 500 universe, which comprises the top 500 companies based on their six-month average full market capitalisation and liquidity. From this universe, the top 100 companies are selected based on their average free-float market capitalisation during the previous six months. Free-float market capitalisation excludes shares held by promoters, government, and other strategic investors, focusing only on shares available for public trading.

Additional criteria include a minimum listing history, high trading frequency, and average daily turnover to ensure that only highly liquid stocks are considered. The index also aims for sectoral representation, balancing exposure across different industries to prevent over-concentration and enhance diversification. The Nifty 100 is reviewed semi-annually, and stocks that no longer meet the stringent criteria are replaced by more eligible companies.

This robust selection methodology ensures that the index remains dynamic, representative, and an effective benchmark for tracking the performance of the Indian equity market’s largest and most actively traded companies.

How is the Nifty 100 index calculated?

The Nifty 100 index is calculated using the free-float market capitalisation weighted methodology, which ensures that each constituent’s weight in the index is proportional to the market value of its shares available to the public. To determine the index value, the free-float market capitalisation of each company is calculated by multiplying its current share price by the number of outstanding shares available for trading (excluding promoter and government holdings).

The sum of the free-float market capitalisations of all 100 constituent stocks is then divided by a base market capitalisation, which is adjusted to maintain continuity whenever there are changes in the index composition or corporate actions such as stock splits, bonus issues, rights issues, or mergers. The formula can be expressed as:

Index Value = (Sum of Free-Float Market Capitalisation of All Constituents) / Base Market Capitalisation × Base Index Value (usually 1,000)

The index is calculated in real-time using the latest traded prices of the constituent stocks during market hours. The base date for the Nifty 100 is January 1, 2003, with a base value of 1,000. This calculation methodology provides transparency, consistency, and reliability, making this index a trusted benchmark for investors and market participants.