NIFTY 500

The NIFTY 500 index covers the top 500 companies on India’s NSE, representing large, mid, and small-cap stocks to give a broad view of the Indian stock market.
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NIFTY 500
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3 min
01-August-2025

The NIFTY 500 is a comprehensive stock market index comprising the top 500 companies listed on the NSE. It includes large-, mid-, and small-cap stocks from multiple sectors, giving a holistic view of market performance. Investors use it to monitor trends, identify leading stocks, and benchmark portfolio returns.

What is Nifty 500?

NIFTY 500 is a diversified index representing the top 500 NSE-listed companies across large-cap to small-cap segments. It serves as a benchmark for evaluating the Indian equity market's performance. As it includes firms of various sizes, the index provides a balanced view of overall market health and sectoral trends.

How is Nifty 500 calculated?

The Nifty 500 index is estimated based on the free-float market cap of each stock. The term ‘free-float market’ here implies trading of shares that are available for the general public. The index value is calculated relative to the reference point, meaning a base year and base value are considered. One can also estimate the free-float market cap by multiplying the number of shares readily available in the market by the price of the equity.

Parameter Description
Methodology Free-float market capitalisation
Base value 1000
Base date January 1, 1995
Equity universe Top companies listed on NSE
Review frequency Semi-annual


NIFTY 500 index value = (Free-float market cap/ Base free-float market cap)* Base of value of NIFTY 500 index.

Benefits of Nifty 500

The Nifty 500 index is leveraged for various purposes and applications, such as comparing fund portfolios, launching index funds, Exchange Traded Funds (ETFs), and other financial products. Financial analysts, policymakers, and investors monitor it closely to track the performance of the Indian economy.

How to invest in Nifty 500?

While you cannot directly invest in the Nifty 500 index, you can always use this index to find the trending stocks in the market and invest in them. Alternatively, you can choose from various other index-linked financial instruments like mutual funds and ETFs to grow your portfolio.

Eligibility criteria

Top 800 companies ranked by average daily turnover and market capitalisation over the past six months are considered for inclusion based on NSE eligibility criteria:

Before you trade Nifty 500 stocks, it is necessary to understand the selection criteria for index constituents. The Nifty indices include all equity shares listed on the NSE. However, it excludes convertible stocks, bonds, warrants, rights, and stocks that provide a fixed return. Companies must form part of the eligible universe for inclusion in the Nifty 500 index. For companies and their stocks to be included in the index, they must be:

  • Ranked within the top 800 based on daily turnover and market cap.
  • Should have traded for at least 90% of days in the last six-month period.
  • The stock must be listed on the NSE.
  • Stocks that are ranked in the top 350 based on their full market capitalisation are automatically considered.

In terms of index governance, a professional team and a three-tier governance structure are in place to manage all NSE indices. The governance includes the Board of Directors of NSE, the Advisory Committee (Equity), and the Maintenance Sub-Committee of the index.

Stocks vs. Mutual funds

Stocks are individual company shares, while mutual funds hold a collection of stocks, bonds, or other assets. You can invest in both to diversify your portfolio, manage risk, and work toward financial goals. Using a mix allows flexibility across market conditions and can help maximise long-term returns.

Stocks Mutual funds
You get to purchase the shares of your target companies. You get to invest by purchasing units from respective Asset Management Companies (AMC)
You could start from a couple of top-performing stocks basis the investment research that you conduct. You could assess the performance of different mutual funds on several platforms to make your decision.
Keep your portfolio diversified by investing in stocks of multiple companies. A mutual fund investment keeps your portfolio diversified.
You can manage your portfolio. A fund manager typically manages the mutual fund portfolio.
You typically buy stocks at a time. You can buy mutual funds through SIPs or lump-sum.

 

Significance of the NIFTY 500 index in financial markets

The NIFTY 500 is a broad-based stock market index comprising the top 500 companies listed on the National Stock Exchange (NSE) of India. It covers around 96.1% of the free-float market capitalization and 96.5% of the total NSE turnover, offering a comprehensive view of the Indian equity market. The historical trend data helps analysts and policymakers analyse and understand market sentiments. It allows investors to diversify their portfolios as the market offers varied investment products, from index-linked mutual funds to ETFs.

Conclusion

The Nifty 500 index provides insights that are prerequisites for making investment decisions. The index has witnessed tremendous growth over the years and is a reliable tool for earning relatively risk-free returns. It is a clear indicator of the performance of stocks of different companies listed on the NSE and, thus, economic health. Investing in index-linked products reduces risks associated with single-stock investments, thus offering diversified exposure to one’s portfolio. It stands out as the top choice for passive investors who refrain from handpicking their stocks.

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Frequently asked questions

What do you mean by Nifty 500?

Nifty 500 is an Indian stock index reflecting the market performance of 500 leading NSE-listed companies. It spans large-, mid-, and small-cap segments, offering diversified exposure across sectors. This broad-based index helps investors understand market trends and serves as a benchmark for portfolio comparison and equity analysis.

Which index is more beneficial—Nifty 50 or Nifty 500?

Nifty 50 includes the top 50 companies, offering focused exposure to large-cap stocks. Nifty 500 covers a broader market, including large-, mid-, and small-caps, making it more diversified but also slightly more volatile.

Is it possible to invest in the Nifty 500 index?

Yes, investors can gain exposure to the Nifty 500 through index funds or exchange-traded funds (ETFs) that replicate its performance, offering a diversified way to invest in the broader Indian equity market.

Is Nifty 500 a reliable option for long-term investing?

Nifty 500 is well-suited for long-term investing as it captures the performance of India’s top 500 listed companies, providing broad diversification and the potential for consistent returns as the economy grows.

How does Sensex differ from the Nifty 500 index?

Sensex tracks 30 major companies on the BSE, while Nifty 500 tracks 500 companies across sectors on the NSE. Nifty 500 offers broader exposure, while Sensex focuses on top blue-chip stocks.

What companies are included in the Nifty 500 index?

The Nifty 500 index consists of the top 500 companies listed on the NSE, selected based on market capitalisation and liquidity, representing large-cap, mid-cap, and small-cap segments across all major industries.

Which companies are eligible for the Nifty 500?

The eligibility criteria include companies that are:

  • Ranked within the top 800 based on both average daily turnover and market capitalisation.
  • Stocks traded for at least 90% of days in the last six-month period.
  • The stock must be listed on the National Stock Exchange.
Which is better Nifty 50 or 500?

Nifty 50 focuses on large-cap, blue-chip stocks, offering stability and lower volatility. Nifty 500 includes large-, mid-, and small-cap companies, providing broader market exposure and diversification. If you're seeking comprehensive coverage, Nifty 500 may be better. For lower risk and consistent performance, Nifty 50 is preferred.

Can we buy Nifty 500?

You cannot directly purchase the Nifty 500 index, but you can invest in index funds or exchange-traded funds (ETFs) that track its performance. These instruments mirror the composition of the Nifty 500, offering diversified exposure to the top 500 companies on the NSE.

Is Nifty 500 good for long-term?

Yes, the Nifty 500 is considered suitable for long-term investment. It offers diversified exposure across market capitalisations and sectors, potentially reducing risk and capturing broader market growth. Over time, it reflects the Indian economy's overall trajectory, making it ideal for wealth creation over extended periods.

What is the difference between Sensex and Nifty 500?

Sensex comprises 30 large-cap companies listed on the BSE, offering a narrower market view. Nifty 500 includes 500 companies from the NSE, spanning large-, mid-, and small-cap segments. Hence, Nifty 500 provides more comprehensive market coverage compared to the sector-specific focus of Sensex.

What comes under Nifty 500?

Nifty 500 includes the top 500 NSE-listed companies ranked by market capitalisation and liquidity. It covers all major sectors and comprises large-cap, mid-cap, and small-cap stocks. The index is designed to represent the performance of the entire listed equity market on the National Stock Exchange.

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