Nifty Next 50

The Nifty Next 50, often referred to as Nifty 50 Junior or simply Nifty Next, is a stock market index in India that represents the performance of the top 50 companies listed on the National Stock Exchange (NSE) which are not a part of the Nifty 50 index. The Nifty 50 and Nifty Next 50 comprise the broader Nifty 100 index. As an investor, you can use the Nifty Next 50 as a benchmark to evaluate the performance of your portfolio or as a basis for your investment strategies.

The Nifty Next 50 index comprises the top stocks listed on the National Stock Exchange (NSE) but are not included in the Nifty 50 index. Companies listed in the Nifty Next 50 are viewed as having the potential to become future leaders in their respective sectors, making the index a valuable tool for tracking the overall health and growth of the Indian stock market. Below are the stocks that are included in the nifty Next 50 index:  

The Nifty Next 50 Index, comprises 50 companies selected from the Nifty 100 excluding the Nifty 50 constituents, undergoes a precise calculation methodology to ensure accuracy and representation. Establishing a base period, often anchored to a specific date like January 1, 2000, with a base value of 1000, the index utilises the free-float market capitalisation method. 

This method considers only tradable shares, accurately reflecting the overall market value of constituent stocks. The calculation involves determining the market capitalisation for each company by multiplying the stock's current market price by tradable shares, aggregating the total market capitalisation, and applying a free-float factor to adjust for non-tradable shares. 

The adjusted market capitalisation is then divided by the sum of all adjusted market capitalisations, yielding the weightage of each stock. The final index value is computed by multiplying the base value with the cumulative product of stock weightages, ensuring a precise representation of market value changes in constituent stocks. 

The Nifty Next 50 Index is handy for comparing how well investment funds are doing and creating index funds, ETFs, and other structured financial products. In simple terms, it helps measure the performance of a specific set of 50 companies, providing helpful information for investors.

The weightage of each stock in the Nifty Next 50 is determined by its market capitalisation relative to the total market capitalisation of all the stocks in the index. The table below depicts the weightage of the top 10 stocks in Nifty Next 50 (as of January 2024):

No, F&O trading in Nifty Next 50 is not possible. However, you can invest in an index fund or an ETF that replicates the performance of Nifty Next 50.

The Nifty Next 50 index comprises the top stocks listed on the National Stock Exchange (NSE) but are not included in the Nifty 50 index. The index is rebalanced every six months upon the review of stocks based on various parameters, including market capitalisation, liquidity, and sector representation.

The eligibility criteria for stocks to be included in the Nifty Next 50 include:

• They must be listed on the NSE
• They must be in the Nifty 100 index but not in the Nifty 50 index
• New stocks are reviewed every three months for inclusion in Nifty Next 50

The closing value of the Nifty Next 50 index is computed by considering the weighted average closing prices of its constituent stocks between 3 PM to 3:30 PM.

It is not possible to directly buy or sell Nifty Next 50 units.  However, you can invest in index mutual funds that specifically target the constituent stocks of the Nifty Next 50 index and replicate the performance of Nifty Next 50.