BAJAJ FINSERV ASSET MANAGEMENT LIMITED.
The Nifty 500 is a broad market index that represents the performance of the top 500 listed companies in India, selected based on full market capitalisation and liquidity. It covers large cap, mid cap, and small cap stocks, accounting for a significant portion of the Indian equity market. Because of its wide coverage, the Nifty 500 is often used as a benchmark to track overall market trends and the performance of diversified equity portfolios.
Includes companies across multiple sectors
Chance to capture opportunities across the market.
Offers exposure to a wide section of the equity market across market capitalisations.
Combines large cap, mid cap, and small cap stocks within a single index structure.
Like the Nifty 500, the BSE 500 is also a broad market index that tracks the performance of large, mid, and small cap companies in India. While both aim to represent the wider equity market, they may differ slightly in index methodology and stock selection criteria.
Nifty 500 is managed by NSE Indices Limited, while BSE 500 is managed by BSE Index Services Pvt Ltd, a wholly owned subsidiary of BSE (formerly Bombay Stock Exchange).
Both indices include approximately 500 stocks, but slight differences in eligibility rules, liquidity filters, and rebalancing methods may lead to variation in constituents.
Nifty 500 has a base date of January 1, 1995, while BSE 500 has a base date of February 1, 1999.
Benchmark reference
Uses the BSE 500 TRI as a benchmark to compare performance.
Future-focussed
The fund follows a megatrend investing approach, focusing on wide-ranging structural shifts have the potential to shape economies, businesses, and societies for years to come.
Growth potential
The fund has delivered 18.25% CAGR since inception as on April 1, 2026. Past performance may or may not be sustained in future.
Active management
The fund can flexibly shift allocations between large, mid and small cap companies to capture potential growth opportunities in different market conditions.
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The Nifty 500 index includes companies across all major market capitalisation segments, making it a broad representation of the Indian equity market. It comprises large cap, mid cap, and small cap companies, each contributing differently to the overall index composition.
Large cap companies
Large cap companies account for the largest portion of the Nifty 500 index. These businesses generally have an established market presence and relatively stable operations. They account for approximately 70.8%* of the total index weight, which influences the overall movement of the index. As per regulatory guidelines, large cap stocks are those ranked 1 to 100 on recognised exchanges.
Mid cap companies
Mid cap companies constitute around 18.6%* of the index. These firms are typically in an expansion phase and may offer higher long-term growth potential compared to large caps, along with relatively higher volatility. As per regulatory guidelines, mid cap stocks are those ranked 101 to 250 on recognised exchanges.
Small cap companies
Small cap companies contribute roughly 10.4%* to the index. These companies may experience higher volatility and carry higher risk. Their limited weight within the index helps moderate their overall impact on index-level fluctuations. As per regulatory guidelines, small stocks are those ranked 251 and beyond on recognised exchanges.
By including companies across market capitalisation segments, the Nifty 500 reflects broader market trends and provides a comprehensive view of the Indian equity market.
*Source: Nifty 500 Index Whitepaper, October 2025.
The Nifty 500 index is calculated using the free-float market capitalisation method. This approach considers only those shares that are available for public trading. Shares held by promoters, the government, strategic investors, trusts, or other locked-in holdings are excluded.
To calculate the index value, the combined free-float market capitalisation of all 500 constituent companies is computed and compared with the market capitalisation during the base period.
The calculation follows a simple formula:
Index value = (Current market capitalisation / Base market capitalisation) x 1,000
The base date for the Nifty 500 index is January 1, 1995, with a base value of 1,000. Company weights are determined by their respective free-float market capitalisation, which means larger companies have a greater influence on index movements.
• Wide market coverage
The Nifty 500 covers more than 90% of India’s listed equity market capitalisation. It includes companies from a wide range of sectors, which may help reduce company-specific and sector-specific concentration risk.
• Exposure across market caps
The index includes large cap, mid cap, and small cap companies. Large caps contribute relatively lower volatility, while mid and small caps add exposure to potential long-term growth over time. Overall, the index reflects a diversified equity exposure.
• Balanced profile
Compared to indices focused solely on mid cap or small cap stocks, the Nifty 500 may show lower volatility. However, since the index has more than 65% exposure to equities, it should be considered high risk and subject to market fluctuations.
• Suitability for long-term horizons
Due to its diversified structure, the Nifty 500 may be suitable for investors looking for potential wealth creation over the long term, provided they have a high risk appetite and the ability to remain invested through market cycles.
It is not possible to invest directly in a market index such as the Nifty 500. An index primarily serves as a benchmark to measure market performance and compare portfolio outcomes.
Investors seeking exposure to the Nifty 500 may consider passive investment products designed to track the index. These include index mutual funds and ETFs that aim to mirror the index composition and performance.
Another approach involves constructing a portfolio that closely resembles the index by holding constituent stocks in similar proportions. However, this requires careful execution, regular rebalancing, and ongoing monitoring.
A third way to get indirect exposure to some of the index’s constituents is through actively managed funds that are benchmarked against this index. Such funds seek to potentially outperform the index over the long term.
The Nifty 500 follows defined eligibility criteria for selecting constituent stocks. The index is reviewed and rebalanced twice a year to ensure it remains representative of the market.
To be eligible, a stock must meet the several conditions, including the following:
● It must be listed on the National Stock Exchange.
● It should rank among the top 800 stocks based on full market capitalisation and average daily turnover.
● Stocks must have traded on at least 90% of the trading days during the previous six months.
● Securities ranked among the top 350 based on full market capitalisation are considered for inclusion.
● The company should have a minimum listing history of one month as of the cut-off date.
The Nifty 500 index is commonly used as a broad market indicator. Asset managers, analysts, and researchers often refer to it to assess overall equity market trends. Since it represents a large share of India’s listed market capitalisation, movements in the index may reflect changes in investor sentiment, economic conditions, and sectoral performance.
The Nifty 500 is an equity index that tracks the performance of 500 companies listed on the NSE, selected based on free-float market capitalisation, liquidity, and other eligibility criteria.
Neither index is inherently more suitable; the choice depends on factors such as investment objectives, risk appetite, and desired diversification. The Nifty 50 primarily represents large-cap companies, while the Nifty 500 offers broader market exposure by including large, mid and small cap stocks.
Direct investment in the index is not possible. Investors may gain exposure through index funds or ETFs that aim to track the Nifty 500.
For investors with a long-term horizon and a very high risk appetite, the index may offer potential opportunities for wealth creation over time, subject to market risks.
The BSE Sensex tracks 30 large cap companies listed on the BSE, whereas the Nifty 500 tracks 500 companies listed on the NSE, providing broader market representation.
The index includes companies from sectors such as banking, information technology, manufacturing, healthcare, energy, and consumer-oriented industries.
Eligibility depends on market capitalisation, liquidity, trading frequency, and compliance with NSE index inclusion norms, among other factors.
The index itself cannot be purchased. Investors may consider index-linked mutual funds or ETFs for exposure.
For investors seeking diversified equity exposure and willing to remain invested over extended periods, the index may be suitable as a long-term investment option depending on individual financial goals and risk tolerance.
The calculator alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. This tool is created to explain basic financial / investment related concepts to investors. The tool is created for helping the investor take an informed investment decision and is not an investment process in itself. Bajaj Finserv AMC has tied up with AdvisorKhoj for integrating the calculator to the website. Mutual Fund does not provide guaranteed returns. Also, there is no assurance about the accuracy of the calculator. Past performance may or may not be sustained in future, and the same may not provide a basis for comparison with other investments. Investors are advised to seek professional advice from financial, tax and legal advisor before investing in mutual funds.
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Bajaj Finserv Limited, an unregistered Core Investment Company (CIC) under RBI Regulations 2020, is a part of the renowned Bajaj Group.
One of India’s leading and most diversified financial services institutions, Bajaj Finserv Ltd provides simple financial solutions to crores of people every day through its group companies. Through continuous innovation, it strives to enrich the lives of communities across the length and breadth of the country and make financial security accessible to all.
Our Investment Philosophy reflects what we, as an organisation, believe will generate a good return on equity investment for our investors in the long term. It dictates our goals and guides decision making.
Alpha (a) is a term used in investing to describe an investment strategy’s ability to beat the market.
Alpha is thus also often referred to as excess return or the abnormal rate of return in relation to a benchmark, when adjusted for risk. Essentially, it means doing better than the crowd without taking disproportionate risk.
Collecting superior information
Analysts and portfolio managers strive to collect superior information about the business and the management of the company. They try to generate superior earnings forecast and the balance strength of the company and the industry, thereby trying to 'beat the market' on information edge. This is an important source of alpha for an investor. However, over the years, retaining the information edge has become more difficult and expensive. With a whole lot of investors trying to collect superior information, how can an investor be sure to continuously have accurate and material information about the companies, ahead of others, all the time?
Processing information better
Even if you don't have material information earlier than the crowd, you can still generate better outcomes if you are able to process this information better. Investors develop models and algorithms with enhanced predictive powers to forecast the next move. Fund managers who invest based on some pure formal analytical models are quantitative managers. Here, the goal is to try and beat other investors based on the sophistication of procedures or analytics. The analytical edge can be quite useful until it gets copied by many, and then it may stop generating superior returns.
Exploiting behavioural biases
As the name suggests, this edge is achieved by superior behaviour in reacting to the inputs available to maximise alpha. Modern finance assumes people behave with extreme rationality. However, researchers in behavioural finance have shown that this is not true. Moreover, these deviations from rationality are often systematic. Behavioural managers try to exploit situations where securities are mispriced by the market because of behavioural factors. At Bajaj Finserv AMC, we endeavour to combine the best of these edges.
