Nifty 200

NIFTY 200 is a stock market index designed and managed by the India Index Services and Products Limited. It comprises companies forming part of NIFTY 100 and NIFTY Full Midcap 100 index. NIFTY 200 is designed to reflect the performance of the large and mid market capitalization companies.

Companies listed on the Nifty 200

As of May 31, 2018, the 200 companies which comprise of NIFTY 100 and NIFTY Midcap 100 index have been mentioned below. Prices of index constituents are sourced from National Stock Exchange (NSE). Since NIFTY 200 is one the broad indices, it is calculated online on all days that the NSE is open for trading in equity shares. It is then disseminated via trading terminals and websites. HDFC Bank Ltd. holds the highest weightage at 7.80% followed by Reliance Industries Ltd. at 5.66%.

*Note: Last Updated on 10 July 2018

Sector Representation

Eligibility Criteria

According to the NIFTY market indices methodology document, which is published by the India Index Services & Products Limited, following are the eligibility criteria to be fulfilled by the companies to become a part of the NIFTY 200 index:

• As mentioned earlier, the constituents that form part of NIFTY 100 and NIFTY Full Midcap 100 are combined to form NIFTY 200. The company’s equity shares must be listed on the National Stock Exchange (NSE). Instruments that provide a fixed return like convertible stock, bonds, preferred stock, rights, and warrants are not eligible for inclusion in the index.
• The NIFTY 200 index is reviewed in conjunction with NIFTY 100 and NIFTY Midcap 100 and on a semi-annual basis.
• Any changes due to inclusion and/or exclusion in NIFTY 100 and NIFTY Midcap 100 will be carried out in NIFTY 200.

How is NIFTY 200 Calculated?

NIFTY 200 index is calculated using free float market capitalisation method. Some of the popular utilisation of the NIFTY 200 index is to benchmark fund portfolios, launch Exchange Traded Funds (ETFs), index funds, and structured products. Constituent changes in the index along with corporate actions like right issuance, stock splits etc. are taken into consideration at the time of calculating the index.

The NIFTY 200 is calculated based on the following formula:

Free Float Market Capitalisation = Shares Outstanding x Price x Investible Weight Factor (IWF)

Index Value = [(Current Free Float Market Capitalisation)/(Base Free Float Market Capitalisation)] x (Base Index Value)

Investible Weight Factor means the number of shares which are available to the public for general trading. Eligibility criteria for newly listed security is checked based on the data for a three-month period instead of a six-month period. NIFTY broad based indices are reviewed twice every year based on six month data ending January 31 and July 31.

Factors Affecting NIFTY 200

The NIFTY 200 Index is affected by several factors like:

1. Political instability: Political events such as elections have a major impact on the stock markets. Riots, political instability, social unrest etc. are also some of the other reasons.
2. Economic growth: The share prices increase if the companies become profitable owing to higher economic growth.
3. Natural disasters: Natural disasters like earthquake, floods also have a negative impact on stock markets.
4. Inflation: Higher consumer prices leads to less sales and often leads to higher interest rates.
5. Interest Rates: Periodic changes in the interest rate by the RBI. Variations in the repo rate also affect the stock prices.
6. Gold Prices: Gold rates are important indication of a recession or an inflation in the economy.

How to Invest in NIFTY 200?

You can invest in individual stocks that are a part of NIFTY 200. It is strongly advised to do a thorough research before investing your hard-earned money in stocks.

Stocks vs. Mutual Funds: here's what we recommend

Stock market investments require a lot of research and knowledge. They do not generally offer any tax benefits and are regarded as high-risk investments. Hence,it is crucial to have a diversified portfolio. At Bankbazaar, we encourage our readers to invest on mutual funds.It doesn't require a lot of knowledge and equity linked mutual fund schemes offer tax benefits. Additionally, since mutual funds comprise stocks from multiple companies, they help in building a diversified portfolio.

DISCLAIMER:

The contents of this post/blog does not constitute financial or other professional advice nor does it imply in any manner a principal-agent relationship, and is not a professional advice on a specific financial matter.