Friday, March 26, 2021

How often are the 50 companies in Nifty changed?

 




How many times does Nifty 50 Reshuffle?


Every six months the constituents of the index are reviewed, leading to replacement of some stocks. A maximum of 10% of the size of the index may be changed in a calendar year.



How would you know the companies which would be eligible for entering Nifty 50?


For qualification of a stock into the index, there are criteria it must meet. These include having enough liquidity and a market impact cost of less than 0.5% for trades of 2 crore rupees, retaining market cap of 500 crore in the last six months, a listing history of six months, the stock in the replacement pool must have a market cap at least twice as large as the index stock with the lowest market cap.


Each change in the Nifty 50 is small, so the continuity of the index is maintained. Yet, at all times, Nifty 50 represents the 50 most important liquid stocks in the country.

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