If you are a regular stock market investor, you must have come across the ‘Nifty 50’ term. It is displayed at most places, giving information about the current nifty 50 indexes. In the stock market, Nifty 50 plays a preeminent role. Investing in Nifty 50 is like investing in the top 50 stock companies in India from 13 different sectors.Â
After the 1990s nifty showed a rapid rise of up to 14 percent which makes it an ideal choice to invest. However, you can not directly start investing in Nifty 50 Let us know some of the best ways we can invest in Nifty 50 in this article.
What is a Nifty 50 Index?
The Nifty 50 consists of the top 50 large-cap firms in India that are market leaders in their respective sectors. Hence, the top reputed and largest enterprises are included in this index. It can be used to track the overall performance of the Indian Stock market and make informative decisions.Â
The National Stock Exchange (NSE) is in charge of sorting and listing these companies in the index list. The two major criteria for selecting companies are overall market capitalization and liquidity.Â
The investment risk in Nifty 50 is significantly lowered because of the presence of top 15 enterprises from diverse sectors where an investor will know which one to choose from the list. Most of the foreign investments are also based on the NIFTY equities.
Selection of Stocks in Nifty 50
There are some major steps undertaken to list a company in the nifty 50 list. Some of them are mentioned below.
- NSE List: To be included in Nifty 50, the company must be listed on the list of the National Stock Exchange (NSE). These companies will remain listed for at least six months then rebalancing occurs.Â
- Market Capitalization: The majority of the top 50 Nifty companies are listed in the index based on their overall market capitalization. It is calculated by multiplying the total shares by the current share price.
- Liquidity: It is one of the other factors for considering a company stock in the nifty 50 list. It depicts that stocks from the nifty 50 must be flexible i,e. Easy to buy and sell. It must have a large trading volume to facilitate large investors.
- Rebalancing: In Nifty 50, stocks are rebalanced twice a year. The first one is near June and the second in December. It works on removing and replacing the stocks that have lost their market value or delisted or have been suspended.Â
It removes the stocks that do not meet the criteria set during the selection of stocks in the first place. The rebalancing takes place automatically based on new emerging enterprises from a sector.
Best Strategies to Invest in Nifty 50
One must be very careful while investing their money. Investing in Nifty 50 is easy, and flexible and you can start with a bare minimum. However, it is important to know the best investment practices. If you are new to the stock market then read some of the best investment strategies below.
1. Buy Stock in the same proportion as the Index
The nifty stocks consist of 50 major enterprises from all over the country. The best way to start your investment is by buying stock in the exact same proportion as the index. You will need to rebalance your portfolios and replicate weight orders daily. It requires you to be active all the time and can be time-consuming or hectic.Â
2. Invest through Index funds or ETFs
You can invest through index funds or Exchange Traded Funds (ETFs) which can also help you track the index performance. With your investment, you will have eyes on all 50 stocks in the list which will lessen the risk factor.
3. Invest through SIP
SIP is also known as a Systematic Investment Plan (SIP). It involves regular investment with a fixed amount through an index fund or ETF. Through SIP you can buy when the prices are low and pause when prices are higher.Â
4. Frequent Sector Rotations Over Time
We can adopt a regular rotation technique where we need to monitor current trends within the indexes and adjust our investment accordingly. We can keep rotating our investment through the sectors according to the present market conditions based on the economic conditions, news, trends, and more.
5. Quality Stocks Selection
Focus on high-quality companies listed in the nifty 50 index with stable earnings options, fundamentals, and competitive advantages. Make sure to research and make some proper analysis before selecting stocks from the nifty 50.Â
6. Long-term Investment Plan
While investing make sure that you do not take a short-term investment plan as they can be volatile. But research proves that with long-term investments profits can be gained. Keep yourself invested through the ups and downs of the market and you can earn some major benefits. It is the best investment practice.
Benefits of Investing in Nifty 50
Some of the major benefits of investing in the Nifty 50 are given below.
- Investing in Nifty 50 is easy and hassle-free. You can start with a minimum investment of nifty 50 with as little as 500 per month SIPs. You can also increase your investments whenever you want completely of your own free will.
- There is a large liquidity among the companies where users can buy or sell whenever they want.
- Having diverse options from over 50 indexes can help in spreading the risk factor and reducing the limit over a single stock or sector.
- There are easy investment options such as index funds, SIPs, ETFs, etc. You can easily invest in diversified large-cap stocks without the need to select individual stocks.
- The Nifty 50 index is available to the public and is transparent.Â
- Professionals can manage your investments where you do not need to handle or worry about your holdings. It also consists of automatic rebalancing and also ensures the same proportion as the nifty 50 index.
List of Top 50 Companies in Nifty 50 Index
Check the table below for the latest list of the top 50 Nifty index enterprises.
| List of Nifty 50 Index Companies | |
| Company Name | Sectors |
| Adani Enterprises | Diversified |
| Adani Ports & SEZ | Infrastructure |
| Apollo Hospitals | Healthcare |
| Asian Paints | Consumer Durables |
| Axis Bank | Banking |
| Bajaj Auto | Automotive |
| Bajaj Finance | Financial Services |
| Bajaj Finserv | Financial Services |
| Bharat Petroleum | Energy – Oil & Gas |
| Bharti Airtel | Telecommunication |
| Britannia Industries | Consumer Goods |
| Cipla | Pharmaceuticals |
| Coal India | Energy – Coal |
| Divi’s Laboratories | Pharmaceuticals |
| Dr. Reddy’s Laboratories | Pharmaceuticals |
| Eicher Motors | Automotive |
| Grasim Industries | Materials |
| HCLTech | Information Technology |
| HDFC Bank | Banking |
| HDFC Life | Financial Services |
| Hero MotoCorp | Automotive |
| Hindalco Industries | Metals |
| Hindustan Unilever | Consumer Goods |
| ICICI Bank | Banking |
| IndusInd Bank | Banking |
| Infosys | Information Technology |
| ITC | Consumer Goods |
| JSW Steel | Metals |
| Kotak Mahindra Bank | Banking |
| Larsen & Toubro | Construction |
| LTIMindtree | Information Technology |
| Mahindra & Mahindra | Automotive |
| Maruti Suzuki | Automotive |
| Nestlé India | Consumer Goods |
| NTPC | Energy – Power |
| Oil and Natural Gas Corporation | Energy – Oil & Gas |
| Power Grid | Energy – Power |
| Reliance Industries | Diversified |
| SBI Life Insurance Company | Financial Services |
| Shriram Finance | Financial Services |
| State Bank of India | Banking |
| Sun Pharma | Pharmaceuticals |
| Tata Motors | Automotive |
| Tata Steel | Metals |
| Tata Consultancy Services | Information Technology |
| Tata Consumer Products | Consumer Goods |
| Tech Mahindra | Information Technology |
| Titan Company | Consumer Durables |
| UltraTech Cement | Materials |
| Wipro | Information Technology |
Top 10 Major Stock Weights in Nifty 50
Check the list of major top 10 stock in nifty 50 by their average weightage percent below.
| Top 10 Major Nifty Stocks by their Weightage | |
| Company Name | Average Weight % |
| Reliance Industries Ltd. | 12.86% |
| HDFC Bank Ltd. | 8.10% |
| Infosys Ltd. | 7.66% |
| ICICI Bank Ltd. | 6.90% |
| Housing Development Finance Corporation | 5.39% |
| Tata Consultancy Services Ltd. | 4.91% |
| Kotak Mahindra Bank Ltd. | 3.51% |
| ITC Ltd. | 3.03% |
| Larsen & Toubro Ltd. | 2.74% |
| Hindustan Unilever Ltd. | 2.67% |
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Nifty 50 FAQs
What is Nifty 50?
The Nifty 50 consists of the top 50 large-cap firms in India that are market leaders in their respective sectors. Hence, the top repute and largest enterprises are included in this index.
How to Start Investing in Nifty 50 as a Beginner?
Start with a demat account with ETFs. You can easily refill your demat account with your bank account. Select the Nifty 50 ETF you want to start your investment with. Constantly monitor and adapt some tips and strategies mentioned in this article.
How to make a profit in Nifty 50?
You can make a profit in Nifty 50 easily by buying stocks in the same percentage as their weightage proportion. You can also invest in Index funds or ETFs which can help you track your investment thoroughly lowering risk factors.
