Nifty 50: What is Nifty 50? How does it work?

National Desk:

 The Indian stock market operates on two major exchanges.  One is NSE or National Stock Exchange and the other is Ball BSE or Bombay Stock Exchange.  Altogether about five thousand companies are registered in these two exchanges.  These are divided into several categories according to the behavior of the companies.  One such class is the Nifty Fifty.
 Nifty Fifty is owned by NSE Indices Limited, a subsidiary of the National Stock Exchange of India (NSE).  This company operates more than one hundred equity indexes except Nifty Fifty.  Nifty Fifty is a sum of fifty large capital stocks.  It operates on the basis of free float market capitalization.  It was listed on the Indian Stock Exchange on April 1, 1997.  Like the Sensex, it is a general indicator that allows you to keep a close eye on the market performance of 50 active companies in 13 sectors of the Indian economy.
Now the question is what is this free float market capitalization?  The simple answer is that free float market capitalization is the total value of the shares of a company that are available for sale to the general public.  The formula for free float market capitalization is Free float market capitalization = the total number of free float shares  the price of a share.

 For example, suppose a company has a total of thousands of shares.  Of these, 400 shares are for sale in the market and 600 shares are held by the company.  If the value of a share of the company concerned is taken to be 20 rupees, then the total number of free float shares of that company is 400.  On the other hand that company free float market capitalization 400 × 20 = 6000.
 The Nifty is restructured in March and September each year.  Through this restructuring process every six months, it is decided to add or exclude a new company by checking the stock quality of the companies.