Nifty Private Bank

Nifty Private Bank Index

NIFTY Private Bank is a sectoral index on the National Stock Exchange (NSE) that tracks the performance of Indian banks in the private sector. It comprises 10 tradeable listed stocks in the banking and financial services business. Launched in 2016, it has a weight cap of 25% and is reconstituted semi-annually to reflect industry changes. NSE Indices Limited, previously known as India Index Services & Products Limited, manages the index through a three-tier structure: the Board of Directors, Index Advisory Committee (Equity), and Index Maintenance Sub-Committee. The Private Bank NIFTY Total Returns Index is ideal for benchmarking fund portfolios and launching ETFs, index funds, and other structured investment products.

How is NIFTY Private Bank Calculated?

The NIFTY Private Bank index value is calculated as follows – 

Index Value = Current Index Market Capitalisation/ (Base Free Float Market Capitalisation * Base Index Value)

Six months' worth of data are used to rebalance the NIFTY Private Bank index semi-annually every January 31 and July 31 of each year. Effective from the final trading day of March and September, the semi-annual replacement of the NIFTY Private Bank stocks list (if any) is carried out. Securities are not covered in the event of a suspension, delisting, or corporate event involving an arrangement, demerger, or acquisition.

How are Stocks Selected in NIFTY Private Bank?

 The 10 companies that make up the NIFTY Private Bank share price are weighted based on a real-time base market capitalisation value and a regularly limited free-float market capitalisation.

NIFTY Private Bank Index Eligibility Criteria:

• Securities must be listed on the National Stock Exchange.
• Part of NIFTY 500.
• If eligible stocks are below 10, deficit stocks are selected from the top 800 ranked stocks.
• Part of the private banking sector.
• Excludes securities with over 50% government ownership.
• 90% or more of the trades throughout the previous six months.
• Listing history of at least six months.
• A recently listed company can be included if it meets the criteria for three months.
• Available for derivatives trading on NSE’s Futures & Options segment.
• Adherence to a cap of 33% for a single stock and 62% for top 3 stocks cumulatively at rebalancing.