Nifty PSU Bank

Nifty PSU Bank

The NIFTY PSU Bank Index is a real-time index on the National Stock Exchange (NSE) that tracks the performance and behavior of public sector banks. Launched in 2007, it consists of 12 PSU stocks tradeable on NSE. The index is reconstituted semi-annually to reflect the changing dynamics of the Indian banking industry. NSE Indices Limited, previously known as India Index Services & Products Limited, manages the index, which is governed by a three-tier structure. The PSU Bank Nifty Total Returns Index is a variant suitable for launching index funds, ETFs, structured products, and benchmarking fund portfolios. The index is reconstituted semi-annually to ensure it continues to reflect the changing dynamics of the Indian banking industry.

Nifty PSU Bank Stock Selection Criteria

• The NIFTY PSU Bank share price is determined by weighing its 12 stocks based on periodically capped free-float market capitalization relative to a base market capitalization value.
• Eligibility criteria include being listed on the National Stock Exchange, being part of the top 800 companies in the NIFTY 500, and holding at least 51% of its share capital by the central and/or state government.
• If the number of eligible stocks falls below 10, deficit stocks are selected from the universe of the top 800 ranked stocks based on average daily turnover and full market capitalization data of the previous six months.
• All PSU banks that are listed and traded can be included in the index since December 27, 2019, provided they meet other eligibility criteria.
• The final selection is based on the average free-float market capitalization, with recently listed companies included if their free-float market capitalization is 1.5 times the index’s smallest constituent’s free-float market capitalization value.

How is the NIFTY PSU Bank Index Calculated?

The index value is computed as follows:

Index value = current free-float market capitalization/(base free-float market capitalization * base index value).

The NIFTY PSU Bank index is assessed semi-annually using six months of data between January and July. The replacement of equities in the NIFTY PSU Bank list (if any) begins on the final trading day of March and September. For more information, you can refer to the Nifty PSU index chart.