Nifty500 Quality 50 stocks list

Companies in the Nifty 500 at the time of each review are eligible if they have at least 1 year of listing history. A non-member stock outside the futures and options segment is dropped if, over the past 6 months, it hit its upper or lower price limit on 20% or more of trading days; hitting both limits on one day counts twice. Companies with more than 20% of promoters' shares pledged are dropped, as are the bottom 10 percentile by 6-month average daily turnover and by turnover ratio (6-month average daily turnover divided by 6-month average free-float market capitalisation).

The 50 eligible stocks with the highest quality scores form the index. Each stock's score combines three measures, each converted to a z-score, which is how far the stock sits from the average of the eligible universe, in units of standard deviation. The measures are return on equity (profit as a share of shareholders' equity) and debt-to-equity (borrowings against equity) from the latest fiscal year, and the variability of year-on-year EPS growth over the previous 5 financial years, worked out from adjusted EPS of the previous 6 years. Consolidated data is used where available, otherwise standalone.

For a non-financial company the three z-scores count one third each, with debt-to-equity and EPS growth variability reversed so that lower leverage and steadier earnings score higher. For a financial services company debt-to-equity is left out and return on equity and EPS growth variability count half each. A positive average z-score becomes the quality score as 1 plus the average; a negative one becomes 1 divided by (1 minus the average). A newly listed company can be considered if its adjusted EPS is enough to measure EPS growth variability over at least 3 financial years.

Free-float market capitalisation is the value of the shares available for public trading, after promoter holdings and similar categories are excluded. A stock's weight comes from multiplying the square root of its free-float market capitalisation by its quality score. No stock may exceed the lower of 5% or 5 times its weight under free-float market capitalisation alone. The cap is applied each half-year at reconstitution, and weights drift with prices in between.

The index is reconstituted and rebalanced twice a year, with cut-off dates of 31 May and 30 Nov, using data to the last trading day of those months. An existing member stays if its quality score ranks within the top 75 among eligible stocks. The 25 highest-ranked non-members replace the lowest-scoring members, and any member ranked below 75 is removed. Stocks that leave the Nifty 500 leave this index at the next review. Four weeks' notice of changes is given to the market.

An unscheduled change is made if a member is removed from the Nifty 500 through a corporate action such as delisting or by an exchange suspension. Each quarter the index is also screened against SEBI's portfolio concentration norms for ETFs and index funds of 10 Jan 2019, and corrected if it fails.

The index has a base date of 1 Apr 2005 and a base value of 1,000. It was launched on 20 Dec 2024 and is calculated in real time.