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
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What is the Nifty 500 Index?
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.
Key Takeaways
- The Nifty 500 Index tracks the performance of 500 companies across large-cap, mid-cap and small-cap segments, making it one of the broadest representations of the Indian equity market.
- The index covers more than 90% of India’s listed market capitalisation and is widely used as a benchmark for diversified equity portfolios.
- Large-cap stocks account for approximately 70.8% of the index weight, while mid-caps and small-caps contribute around 18.6% and 10.4%, respectively.
- The Nifty 500 is calculated using the free-float market capitalisation method, giving greater weight to companies with higher publicly tradable market value.
- Investors cannot invest directly in the index but can gain exposure through index funds and ETFs that track the Nifty 500.
- The index provides exposure to large-cap, mid-cap and small-cap companies, offering representation across multiple segments of the Indian stock market.
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.
Why choose the Nifty 500 Index?
Representation – Includes companies across multiple sectors
Growth – Chance to capture opportunities across the market.
Breadth – Offers exposure to a wide section of the equity market across market capitalisations.
Diversification – Combines large cap, mid cap, and small cap stocks within a single index structure.
How is the Nifty 500 calculated?
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.
Benefits of the Nifty 500
- 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 very high risk appetite and the ability to remain invested through market cycles.
Nifty 500 companies
As of May 29, 2026, the Nifty 500 has 504 companies spanning various sectors including financial services, oil, gas and consumable fuels, capital goods, automobiles and auto components, healthcare and more.
The top 10 constituents by weightage are as follows:
| Company Name | Weight (%) |
| HDFC Bank Ltd. | 5.89 |
| ICICI Bank Ltd. | 4.64 |
| Reliance Industries Ltd. | 4.61 |
| Bharti Airtel Ltd. | 2.90 |
| Larsen & Toubro Ltd. | 2.47 |
| Infosys Ltd. | 2.10 |
| State Bank of India | 2.07 |
| Axis Bank Ltd. | 1.91 |
| Kotak Mahindra Bank Ltd. | 1.46 |
| ITC Ltd. | 1.43 |
Source: Nifty 500 Factsheet, NSE | Data as on May 29, 2026 | Index constituents can change from time to time. Please refer the exchange website for the exhaustive and updated list of Nifty 500 Companies.
Please note that the reference to any industry/sector/stock is provided for illustrative purposes only. This should not be construed as a research report or a recommendation to buy or sell any security or sector.
Risks and limitations of Nifty 500
There are also some limitations of the Nifty 500 that investors may consider:
● Market risk
The Nifty 500 is an equity index and is subject to market fluctuations. Its value can rise or fall depending on economic conditions, corporate earnings, interest rates, global cues and investor sentiment.
● Large-cap tilt
Although the index includes large cap, mid cap and small cap companies, large cap stocks account for a major portion of the index weight. As a result, the index movement may be influenced more by large companies than by mid or small cap stocks.
● Exposure to mid and small cap volatility
The index includes mid cap and small cap companies, which may offer long-term growth potential but can also be more volatile than established large cap companies.
● Concentration by weight
The Nifty 500 is weighted by free-float market capitalisation. This means companies with higher free-float market value have a larger impact on index performance, even though the index includes 500 companies.
Nifty 500 vs Nifty 50
While the Nifty 500 and Nifty 50 are both benchmark indices of the Indian equity market, they differ vastly in their composition and representation.
| Parameter | Nifty 500 | Nifty 50 |
| Composition | Tracks 500 companies listed on the NSE | Tracks 50 large and liquid companies listed on the NSE |
| Market coverage | Provides broad exposure across large cap, mid cap and small cap companies | Represents only large cap companies |
| Diversification | Offers wider diversification across companies and market capitalisation segments | Focuses only on the large cap space, but offers diversification within it |
| Risk profile | May carry relatively higher volatility due to exposure to mid and small cap companies | May be relatively less volatile than indices that have mid and small cap exposure |
| Return potential | May capture growth opportunities from a wider section of the market | Reflects the performance of established companies |
| Suitability | May be suitable for investors seeking broad market exposure with a long-term view and high risk appetite | May be suitable for investors seeking exposure to India’s leading large cap companies |
| Common use | Used as a broad market benchmark for diversified equity portfolios | Used as a benchmark for large cap equity performance |
How to invest in the Nifty 500?
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. However, investors can gain exposure to the Nifty 500 in the following ways:
- Through index mutual funds: Investors may consider index mutual funds that aim to track the Nifty 500. These funds invest in the same constituents and in the same proportions as the Nifty 500 and seek to mirror its performance, subject to tracking error.
- Through ETFs: Exchange-traded funds (ETFs) are a type of mutual fund, but unlike other categories, they are traded on the stock exchange. Like index funds, Nifty 500 ETFs also mirror the Nifty 500 and seek to replicate its performance, subject to tracking error. They may be considered by investors who have a demat/trading account and seek intra-day trading flexibility.
- Through direct stock investing: Another approach is to construct a portfolio that closely resembles the index by holding constituent stocks in similar proportions. However, this requires careful execution, regular rebalancing and ongoing monitoring.
- Through actively managed funds: Investors may also get exposure to some Nifty 500 constituents through actively managed funds that use the Nifty 500 as a benchmark. Actively managed funds do not replicate the index – fund managers create their own portfolio within regulatory mandates – and seek to potentially outperform it over the long term.
Stocks vs mutual funds
Before choosing between stocks or mutual funds for Nifty 500 investments, it may be beneficial to closely look at the differences between the two. The suitable route depends on the investor’s knowledge, time, risk appetite and ability to manage the portfolio.
| Parameter | Stocks | Mutual funds |
| Meaning | Stocks represent direct ownership in a company. | Mutual funds pool money from multiple investors and invest in a basket of securities such as stocks, bonds or other assets |
| Investment control | Investors choose individual stocks based on their own research and preferences | Fund managers make investment decisions based on the scheme’s objective |
| Diversification | Depends on how many stocks an investor buys and how the portfolio is allocated | Mutual funds offer built-in diversification across multiple securities |
| Risk | Can be higher if the investor holds only a few stocks or does not diversify adequately | May be reduced through diversification. However, returns remain subject to market risk and conditions |
| Research and monitoring | Requires regular research, tracking of company performance, market conditions and portfolio changes | Requires comparatively less active monitoring, as the fund is professionally managed. |
| Cost | May involve brokerage, demat charges and transaction costs | May involve expense ratio, exit load and other scheme-related charges |
| Suitability | May suit investors who have the knowledge, time and risk appetite to select and monitor individual stocks | May suit investors who prefer a more structured and professionally managed investment route |
Eligibility criteria for inclusion in the Nifty 500 index
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 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.
Significance of the Nifty 500 Index in financial markets
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.
FAQs on Nifty 500
What does Nifty 500 mean?
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.
Which index is better — Nifty 50 or Nifty 500?
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.
Is it possible to invest in the Nifty 500 index?
Direct investment in the index is not possible. Investors may gain exposure through direct stocks or index funds and ETFs that track the Nifty 500.
How does Sensex differ from the Nifty 500 index?
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.
What is the difference between Nifty 100 and Nifty 500?
The Nifty 100 tracks the performance of the top 100 large cap companies listed on the NSE, while the Nifty 500 tracks 500 companies across large cap, mid cap and small cap segments. As a result, the Nifty 500 offers broader market representation than the Nifty 100.
What are the Nifty 500 companies?
The index includes companies from sectors such as banking, information technology, manufacturing, healthcare, energy, and consumer-oriented industries. Check the ‘Nifty 500 companies’ section on this page for the list of top 10 companies by weightage on the index.
What companies are included in the Nifty 500 index?
The index includes companies from sectors such as banking, information technology, manufacturing, healthcare, energy, and consumer-oriented industries.
Which companies are eligible for the Nifty 500?
Eligibility depends on market capitalisation, liquidity, trading frequency, and compliance with NSE index inclusion norms, among other factors.
Can we buy Nifty 500?
The index itself cannot be purchased. Investors may consider index-linked mutual funds or ETFs for exposure.
Is it good to invest in Nifty 500?
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.
