NIFTY is an abbreviation for National Fifty, also commonly called NIFTY 50. NIFTY is an index coined by the NSE on 21st April 1996. NIFTY covers 50 stocks from different sectors of the Indian economy that include – IT, financial services, consumer goods, entertainment and media, financial services, metals, pharmaceuticals, telecommunications, automobiles, pesticides and fertilizers, and other services.
NIFTY works to follow the trends and patterns of companies that are the most liquid and largest Indian securities.
Every six months, NIFTY is reconstituted, and the performance of a stock is considered in this period. Depending on this performance, and as long as a company and its stock fulfill all the eligibility criteria, the list might include or eliminate new/old stocks, respectively. In case any new additions and eliminations are made, the businesses in question are informed through a notice four weeks before reconstitution.