When determining the Nifty 100, the market value of each company is found by multiplying its share price with the total equity. To refine this, the equity is multiplied by the share price to calculate the free-float market value, adjusting for the Investable Weight Factor (IWF) that reflects actively traded share proportions.
The Nifty 100 is computed using a starting point of 1,000 as its base value. The daily index value is established by dividing the current market value by the product of the base market capital and the base value of 1,000. This calculation accommodates changes resulting from corporate actions like rights issues, bonus issues, stock splits, and more.
In essence, the Nifty 100 Index mirrors the combined market values of its top 100 companies, considering free-float and IWF. The calculation, based on a base value of 1,000, ensures an ongoing representation of the collective performance of these companies in the stock market, factoring in changes in valuations and corporate actions.