Nifty 50 at 29: Tracing the journey from base value to market benchmark

India’s benchmark equity index, the Nifty 50, marks its 29th anniversary today, April 22, 2025. Introduced by the National Stock Exchange (NSE) on this day in 1996, just two years after the exchange began operations, the index was launched with a base date of November 3, 1995, and a base value of 1,000. Derivatives trading on the Nifty 50 began on June 12, 2000, further deepening its role in India’s financial markets.

What is the Nifty 50?

The Nifty 50 is a diversified index of 50 blue-chip companies, spanning 15 sectors of the Indian economy. It represents India’s largest and most liquid stocks, making it a widely used benchmark for mutual funds, ETFs, and institutional investors both in India and globally. The index plays a vital role in portfolio benchmarking, index-based derivatives trading, and passive investment strategies.

As of March 28, 2025, the Nifty 50 accounts for approximately 55.48% of the free-float market capitalization of all stocks listed on the NSE. Over the six months ending March 2025, its constituents accounted for around 30.21% of the total traded value on the exchange.

Often viewed as a barometer of India’s economic and market sentiment, the Nifty 50 continues to reflect the country's dynamic growth story, offering investors a snapshot of the nation’s most influential companies and economic trends over nearly three decades.

Over nearly three decades, the Nifty 50 has delivered a compound annual growth rate (CAGR) of 12.93% (as of April 21, 2025), turning into a wealth creation tool for long-term investors and an anchor for India's growing passive investment landscape.

What started as a benchmark of 50 blue-chip companies has now evolved into the heart of a much larger index ecosystem. Today, the Nifty family spans 412 indices, covering everything from large-cap to thematic and ESG-focused indices, driving financial innovation and investor engagement across asset classes.

Its global appeal is also notable — with 60 Exchange-Traded Funds (ETFs) and Index Funds tracking the Nifty 50 across international markets, managing a cumulative Assets Under Management (AUM) of ₹4.4 lakh crore (approx. USD 52 billion).

Growth journey

Since its inception, the Nifty50 has charted a remarkable growth journey, achieving several major milestones. It crossed the 1,000-point mark in December 1999, then doubled to 2,000 by December 2004. The index reached 3,000 in January 2006 and 4,000 by the end of that same year. By September 2007, it climbed past 5,000. A decade later, in July 2017, it touched 10,000, marking a key milestone in its long-term trajectory.

In recent years, the index’s growth has accelerated significantly. It crossed 15,000 in February 2021, 20,000 in September 2023, and 25,000 in August 2024. On September 24, 2024, the Nifty50 surpassed the 26,000 level for the first time, eventually hitting an all-time intraday high of 26,277.35 the next day, and closing at a record 26,216.05 on September 26.

These peaks were driven by robust corporate earnings, strong macroeconomic indicators, and increased participation from both retail and institutional investors. However, the index has also weathered its share of downturns, including corrections during the 2008 global financial crisis, the COVID-19 pandemic, and more recently, market volatility stemming from U.S. recession fears and reciprocal tariffs under President Donald Trump.

Despite these setbacks, the index has consistently rebounded, showcasing resilience over time.

Top stocks

Based on data from ACE Equities, 20 out of the 50 constituent stocks in the Nifty50 index have been part of the index since its inception. These long-standing stocks include major companies such as Reliance Industries (RIL), State Bank of India (SBI), Asian Paints, Bajaj Finance, Grasim Industries, HDFC Bank, Hindustan Unilever, Infosys, ITC, JSW Steel, Kotak Mahindra Bank, Larsen & Toubro, Mahindra & Mahindra, Nestlé India, Oil & Natural Gas Corporation, Sun Pharmaceutical Industries, Tata Motors, Tata Steel, Titan Company, and Wipro.

Passive investing

The Nifty 50 also leads India's passive investing revolution, representing 76% of the total number of passive funds and 73% of AUM within the segment. Its consistent methodology, liquidity, and sector representation have made it the benchmark of choice for fund managers and retail investors alike.

A Nifty Index Fund is a type of mutual fund that mirrors the performance of the Nifty 50 index by investing in the stocks of companies that make up the Nifty 50. The objective of a Nifty 50 Index Fund is to replicate the returns of the Nifty 50 index. Some of the leading Nifty 50 funds include UTI Nifty 50 Index Fund, Bandhan Nifty 50 Index Fund, SBI Nifty Index Fund, HDFC Nifty 50 Index Fund, Motilal Oswal Nifty 50 Index Fund, Nippon India Index Fund, ICICI Prudential Nifty 50 Index Plan, HSBC Nifty 50 Index Fund, DSP Nifty 50 Index Fund, Tata Nifty 50 Index Fund, Aditya Birla Sun Life Nifty 50 Index Fund, LIC MF Nifty 50 Index Fund, Franklin India NSE Nifty 50 Index Fund, and others.