Nifty PSE

What is Nifty PSE?

The Nifty PSE index tracks the performance of listed Public Sector Enterprises (PSEs) where the Government of India holds at least 51% of the shareholding. The index comprises 20 such enterprises from various sectors, including energy, minerals, capital goods, and financial services. These companies are strategic assets of the Indian government and often play a key role in national economic development. Nifty PSE reflects the performance of government-owned corporations and is commonly tracked by investors looking to benefit from themes like disinvestment, strategic monetization, or PSU-focused reforms.

The index captures the investor sentiment towards government-controlled businesses and is often influenced by budget announcements, subsidy policies, and global commodity prices. It is particularly useful for thematic investing and provides exposure to sectors such as oil & gas, power, steel, and infrastructure—all of which are essential to India’s long-term growth story.

Nifty PSE selection criteria

Stocks in the Nifty PSE index are selected from the Nifty 500 universe. The key eligibility requirement is that the central government must hold at least 51% of the company’s paid-up share capital. From this subset, companies are selected based on free-float market capitalisation and liquidity (average daily turnover over six months). Only actively traded companies with a strong public float and operational performance are considered. The index maintains sectoral diversity by limiting the concentration of any one sector, ensuring broad representation of India’s public sector space. The index is reviewed and rebalanced semi-annually, typically in March and September. Any company undergoing major structural changes or failing to meet listing requirements may be excluded. The selection approach helps keep the index investable, policy-relevant, and liquid.

How is the Nifty PSE index calculated?

Nifty PSE is calculated using the free-float market capitalisation-weighted method, which takes into account only the shares available for public trading. The base date for the index is January 1, 1995, and the base value is 1000. Index values are updated in real time during trading hours based on live stock prices. NSE Indices Ltd oversees the index calculation, rebalancing, and governance. At the time of reconstitution, stock weights may be capped to maintain diversification. This methodology ensures the index reflects the actual market sentiment and investment potential of public sector enterprises. It also ensures compliance with global indexing standards for liquidity and tradability.