Difference Between Nifty 50, Nifty Next 50, and Nifty 100

The Nifty 50, Nifty Next 50, and Nifty 100 are benchmark equity indices of the National Stock Exchange that track leading large-cap companies in India. The Nifty 50 represents the top 50 companies according to free-float market capitalisation. The Nifty Next 50 includes the next 50 emerging large-cap companies. The Nifty 100 combines both indices, offering broader market exposure. Understanding their structure and coverage helps investors assess diversification, market representation, and relative risk within India’s large-cap segment. This article explains the difference between Nifty 50 vs Nifty Next 50 vs Nifty 100. 

What is Nifty 50?  

Here is what nifty 50 is: 

• Represents Top 50 Large-Cap Companies: Nifty 50 includes the top 50 companies with the highest free-float market capitalisation. 
• Sectoral Diversification: Covers major sectors such as banking, IT, energy, and FMCG. 
• Benchmark Index: Widely used as a performance benchmark for mutual funds and ETFs. 
• High Liquidity: Stocks in the index generally witness strong trading volumes. 
• Relatively Stable Price Behaviour: Established businesses often show comparatively moderate volatility. 
• Periodic Rebalancing: The index is reviewed semi-annually to maintain representation of leading companies. 
• Market Indicator: Often reflects the overall direction of India’s large-cap market segment. 

What is Nifty Next 50?  

Let’s understand what the Nifty Next 50 is: 

• Tracks New Big-Cap Firms: The Nifty Next 50 tracks the 50 firms that have been classified by market capitalisation after the Nifty 50.  
• Growing Companies: Compared to the well-established leaders in the Nifty 50, these companies are frequently in the expansion stages.  
• Price Fluctuations: Compared to the Nifty 50, stocks in this index typically experience high price fluctuations.  
• Free-Float Methodology: Each company's publicly available share capital determines how much weight is assigned.   
• Diversified Sector Presence: Companies in this index often operate in expansion phases compared with established leaders. 
• Options for Earnings Growth: Several stakeholders show growing market share and company size.   
• Moderate-to-High Volatility: Compared to well-known large-cap indices, fluctuations in prices may be more.   

What is Nifty 100?  

Here is what the Nifty 100 means: 

• Combination of Two Major Indices: All Nifty 50 and Nifty Next 50 companies are included in the Nifty 100.    
• Covers the Top 100 Large-Cap Companies: This gives a more comprehensive view of the large-cap market.   
• Wider Market Representation: It is used by investors to monitor general patterns in the large-cap market.  
• Weighted by Free-Float Market Capitalisation: Larger companies receive a higher weight in index calculation.  
• Balanced Exposure Structure: It blends the stability of established firms with growth-oriented emerging companies.  
• Sector Diversification: The index covers more industries than the Nifty 50 alone.  
• Benchmark for Broad Large-Cap Funds: Several index funds track it for diversified exposure.  
• Periodic Review Mechanism: The composition is reviewed regularly to match market rankings.  
• Reflects Market Breadth: It provides a comprehensive picture of the large-cap space.  
• Useful for Portfolio Benchmarking: Investors compare diversified portfolios against this index.  

Key Differences Between Nifty 50, Nifty Next 50, and Nifty 100  

The following table highlights the key differences between Nifty 50 vs Nifty Next 50 vs Nifty 100  

Which Index Should Investors Focus On?  

Choice depends on investment goals and risk tolerance. Nifty 50 suits investors preferring stable exposure. Nifty Next 50 appeals to those seeking higher growth with wider price swings. Nifty 100 offers a middle path by combining both segments. Many investors distribute allocations across these indices for diversification in the large-cap category.  

Conclusion  

Each of the Nifty 50, Nifty Next 50, and Nifty 100 offers a unique perspective on the large-cap Indian market. The Nifty 50 focuses on established companies with steady performance, whereas the Nifty Next 50 includes companies with the potential to become large-cap leaders. Nifty 100 uses both index to give greater insight into the top 100 companies.   
 

By understanding the difference between nifty 50 and nifty next 50, investors can choose the appropriate index according to their investing goals and risk tolerance. Using a reliable online trading app may facilitate more organised portfolio planning and better decision-making.