Nifty 50 stocks - weightage

neha1101 · July 9, 2025, 4:24am

I was reviewing SBI nifty 50 portfolio statement (june 2027). The weightage composition is as follows

Stocks over 10% weightage - 1 - 13.16% HDFC
Stocks over 5% - 2 stocks - Icici and Reliance
stocks over 3 to 5% - 5 stocks
stocks over 2 to 5% - 5 stocks
stocks over 1 to 2% - 13 stocks
stocks less than 1% - 24 stocks

How on earth will I make money when 37 stocks are less than 2% weightage of which 24 stocks are less than 1%? Am I glad I started putting incremental money in SBI Nifty 50 equal weighted ETF. Wonder if there is a ETF for the stocks less than 1%

HDFC Bank Ltd.	13.16
ICICI Bank Ltd.	8.88
Reliance Industries Ltd.	8.76
Infosys Ltd.	4.97
Bharti Airtel Ltd.	4.72
Larsen & Toubro Ltd.	3.71
ITC Ltd.	3.34
Tata Consultancy Services Ltd.	3.05
Axis Bank Ltd.	2.96
Kotak Mahindra Bank Ltd.	2.74
State Bank of India	2.72
Mahindra & Mahindra Ltd.	2.42
Bajaj Finance Ltd.	2.15

List of stocks less than 1%

Bajaj Finserv Ltd.	0.96
Grasim Industries Ltd.	0.94
Jio Financial Services Ltd.	0.92
Tech Mahindra Ltd.	0.92
Adani Ports and Special Economic Zone Ltd.	0.92
Asian Paints Ltd.	0.91
Hindalco Industries Ltd.	0.86
Shriram Finance Ltd.	0.85
JSW Steel Ltd.	0.83
Oil & Natural Gas Corporation Ltd.	0.82
Bajaj Auto Ltd.	0.80
Coal India Ltd.	0.77
Nestle India Ltd.	0.76
HDFC Life Insurance Company Ltd.	0.75
Cipla Ltd.	0.73
SBI Life Insurance Co. Ltd.	0.71
Dr. Reddy’s Laboratories Ltd.	0.67
Eicher Motors Ltd.	0.67
Wipro Ltd.	0.65
Apollo Hospitals Enterprise Ltd.	0.63
Tata Consumer Products Ltd.	0.62
Adani Enterprises Ltd.	0.59
IndusInd Bank Ltd.	0.50
Hero MotoCorp Ltd.	0.47

NIFTY NEXT 50 ETF is much better,
Stocks less than 1% is only 3.

Life Insurance Corporation of India	0.90
Swiggy Ltd.	0.65
Bajaj Housing Finance Ltd.	0.47

pingpong · July 9, 2025, 4:34am

There is Nifty 50 Equal Weight Index which probably has ETFs. It has equal weightage for all underlying stocks.

sandeep_cs · July 9, 2025, 4:35am

I believe the main reason is this:

Market cap-based weighting dynamically adjusts with a company’s price and fundamentals. As a company grows in value, its weight in the index increases — ensuring the index evolves in line with real economic trends.
On the other hand, equal weighting gives the same importance to a ₹1 lakh crore company as it does to a ₹5 lakh crore giant, which misrepresents their actual impact on the market and economy.

neha1101 · July 9, 2025, 4:36am

Yes I am invested in this ETF - Equal weighted one the weightage is 2% spread over stocks. Wondering if there is one for the tail end of 24 stocks which is less than 1%

neha1101 · July 9, 2025, 4:37am

Understood, but wonder if there is a ETF focused on this.

pingpong · July 9, 2025, 4:38am

I don’t think there is one for those 24 stocks explicitly.

sandeep_cs · July 9, 2025, 4:52am

Sorry @neha1101, I’m not aware of any ETF that fits your requirement at the moment. If I come across one, I’ll be sure to update it here.

Akash_Shah · July 9, 2025, 8:46am

Same way as so many people who invested in nifty 50 over the years made money

Either you believe in index and do index investing, or you do not believe in index and do active investing. This believing in index but not believing in whole of it is kind of neither here nor there approach

neha1101 · July 9, 2025, 1:48pm

The point being not to be “the so many people” believing in what is provided. When the AMC is giving info about the constituents, it is perfectly ok to review and modity ones strategy. Mine is being invested in the top 50 company of india. For this the start point is Nifty 50 ETF.

Now, 37 companies of the Top 50 has miniscule weightage. Yes I can accept what is served and be like so many people or be constructive and find ways and means to invest in the tail of the Top 50 companies of India by analysing the information provided.

One option is invest in Equal Weighted Nifty 50 ETF along with the regular ETF. This i believe will increase my money which is invested in these tail companies.

Now that the 37 tail stocks is covered by 2% instead of 0.50 or less, the option is to find out is there any other ETF which invest in these low weightage stocks of Nifty 50. I found out Icici pru Nifty 200 quality 30 has higher weightage for 11 stocks who are tail in Nifty 50. But 19 other stocks are not falling under Top 50 but the names are well known and I am sure they are good companies but not falling under top 50.

There is another ETF which I am reviewing, HDFC NIFTY100 Quality 30 ETF. Could not complete this exercise, as I had to stop and reply to this message. So to arrive at my strategy, of being invested with good weightage in Top 50 companies of India, I should have

Nifty 50 - Core portfolio
Nifty 50 Equall Weighted
HDFC Nifty 100 Quality 30 ETF (if the constitutents weights match my need) or Icici Pru nifty 200 quality 30. I prefer HDFC as their basket is of Nifty 100 stocks which will be the top 100 stocks.

By investing in all of the above, I would be, in my understanding have greater weightage which means more of my money invested in the Tail of Nifty 50.
Just trying my best in achieving my objective/strategy and do not want to be the “so many people” who invest in whats given to them, like you mentioned.

Once done, I will go for direct investing in one or two tail stocks if need be after studying their financials in depth.

I have done this exercise with Nasdaq 100 + Faang + MIRAE ASSET S AND P 500 50 ETF.

Need to thank @Bhuvan for this post listing all the ETF in India.

cvs · July 9, 2025, 3:06pm

I found this specific part of the original post to be confusing / different from the rest of the original post.

Because that is what the logic of NIFTY50 is.
Investing in large-cap is about investing in a “winner take all” tendency in the markets.

Sure, it is not the only way to “make money”.
Nor is it the best way to “make money” in all periods / each year.

Are we “making money” investing in NIFTY50?
Yes.

Are we exposed mostly to a very few number of stocks (even within that list of 50)?
Also yes (currently).

Apart from the above bit about “making money”,
this topic-thread starts with NOT believing in the philosophy of the NIFTY50 index.

IIUC, a NIFTY50 ETF is simply being used as a quicker way to get exposure to a bunch of stocks that happen to partially coincide with the list of stocks that one wishes to purchase. The desired list of stocks is different from NIFTY50, and even any desired stocks that happen to be in the ETF, the desired weightages (% of portfolio) are different,

Few thoughts/questions about the execution of this strategy…

Q1. @neha1101 How do you plan to deal with balancing your portfolio to match your strategy in the scenarios where the NIFTY50 index constituents change (or their % changes) over time and you are probably left doing a lot of math due to holding a combination of ETF(s) and individual stocks. In such scenarios, would it have been simpler to directly invest and hold the stocks one is interested in (no ETFs)?

Q2. Are there any tax-advantages with getting exposure to part of one’s desired equity portfolio using an ETF? For example, if holding individual stocks, some of the dividends that one would have received and potentially be taxed-upon, do they get reinvested in ETFs without facing the tax burden / facing a lower tax burden?

Q3. Any other advantages to prefer an ETF-route to achieve only part of one’s desired portfolio?

Q4. Searching around a bit online, this proposed approach sounds a lot like the Core-Satellite investment strategy implemented using ETFs. Is that exactly what it is, or any other nuance involved here?

There appears to be a variety of significant effort involved in the core-satellite approach.

Source

neha1101 · July 10, 2025, 4:30am

Clarification

This was just an figure of speech/expression. Not to be taken literally - Yes I know Nifty 50 the way it functions. I am heavily (again in my capacity) invested in this product and fully understand how it works.

On hindsight should have rewritten this sentence. The point being, how to increase exposure on the tail of Nifty 50. Maybe this would have avoided confusion.

My Intention is to be invested in the top 50 companies of India sizably. Not bothered if one or two leaves or new ones come in during the rejig. This is ok but I should be invested sizably in all of the 50 stocks in Nifty. I can do it individually but it will be too cumbersome and I dont have that kind of money.

As I mentioned above, the intention is to be invested in the top 50 companies. I am aware there will be rejig. There are two rejig which happens and maybe 4 to 5 companies get dropped out. This is ok than having 37 stocks with less than 0.50% weightage.
I just want to be invested in these 50 companies sizably. Example Tata Consumer the weightage is 0.62%. If I buy today Nifty 50 units for 10,000. My investment in Tata Consumer will only be INR 62. (Hope I am correct in my understanding) and 1,316 will be going to HDFC Bank. Now If I buy 10,000 of Nifty Equal weighted index, my investment in Tata Consumer will be 200 instead of 62.

I am searching for a ETF where the weightage on the tail is sizable over 5%.

I feel, it is point less to keep investing in Nifty 50 blindly and need to think of new ways where I can increase my investments in the tail stocks. This will act as a buffer too in case the tail stocks increase in value whilst the top remain stagnant if I am invested sizably in the tail stocks.
I started off investing in Nifty 50 and now I have sizable units. Now I am building up the Equal weighted Index at the same time with incremental money. This will act as a balance. Trying to find out any other ETF which has the tail with higher weightage.

I am a active investor and invest directly in stock market. I repeat invest and not trade. So I have a demat account since 2007 and been active in my way in the market. Hence prefer ETF to mutual fund, which I desist. ETFs are great because of the low commission and it covers the portfolio mix of what I want. Top 50 or 100 companies of India. Also I can buy at the market price and not wait for the next day.

I simply want to be invested in sizable way in the top 50 companies. Not too keen in investing directly in the 37 tail stock. Just trying to find out the best option so that my money is invested in good amount in all of the 50 stocks and not concentrated in the top 10.

Equal weight index is great for me as it distributes my money when invested at 2% to all of the stocks. Trying to figure out ways of increasing this from 2% without going direct.

neha1101 · July 10, 2025, 5:24am

Just completed the weightage exercise comparison for myself. Thought of sharing this.


		Weightage
Sl No	Name of the Instrument / Issuer	Nifty 50	HDFC Nifty100 Quality 30 ETF	ICICI Prudential Nifty 200 Quality 30 ETF
1	Wipro Ltd.	0.65	2.42
2	Hero MotoCorp Ltd.	0.47	2.58	2.84
3	Tech Mahindra Ltd.	0.92	2.77
4	Dr. Reddy’s Laboratories Ltd.	0.67	2.87
5	Eicher Motors Ltd.	0.67	3.05
6	Bajaj Auto Ltd.	0.80	3.58	3.89
7	Asian Paints Ltd.	0.91	3.99	4.23
8	Maruti Suzuki India Ltd.	1.40	3.99
9	Coal India Ltd.	0.77	4.51	5.10
10	Bharat Electronics Ltd.	1.30	4.68	5.42
11	HCL Technologies Ltd.	1.58	4.84	4.37
12	Hindustan Unilever Ltd.	1.76	4.85	5.11
13	Infosys Ltd.	4.97	4.92	4.16
14	ITC Ltd.	3.34	4.96	4.45
15	Tata Consultancy Services Ltd.	3.05	4.99	4.22
16	HDFC Bank Ltd.	13.16	5.02
17	Nestle India Ltd.	0.76		5.66

Please note common shares in all the three are taken.

RajendraPatil · July 10, 2025, 6:00am

One way to settle debate is to check historical rolling returns.
I could check NIFTY 100 vs NIFTY 100 equal.

courtesy : advisorkhoj website.

TLDR: from 2004 to 2025 (which consists of boom, bust, stagnancy periods) on 3 year rolling returns difference between NIFTY 100 and NIFTY100 equal weight is small. One can choose the Total market or Equal weight depending on own preference.

I could not get data for NIFTY50 but IMHO there should not be much difference in behavior pattern

neha1101 · July 10, 2025, 6:04am

My need or requirement is to be invested in top 50 stocks sizably irrespective of returns.

cvs · July 10, 2025, 7:30am

Usually, hard to prove a negative. But, i will stick my neck on the line and state that
since there aren’t any indices with the above desired philosophy
(shall we call it “NIFTY 50 inverse weighted” ?),
we will not find an ETF that invests in the top 50 stocks with more weightage to the tail stocks.

[ Source ]

We may find other ETFs (like those listed in earlier in this topic-thread) that happen to currently have significant exposure to the current tail of NIFTY50 stocks. However, since these ETFs aren’t picking those stocks due to them being the NIFTY 50 tail, rather due to those stocks satisfying other aspects (eg. lower volatility, EPS, momentum, …), over time holding these ETFs may not continue to provide exposure to “top 50 stocks” (the desired investment philosophy in this topic-thread).

Investing in ETFs tracking the NIFTY 50 Equal Weight index sounds like the way to go.
Combined with liquidating one’s existing holdings tracking NIFTY 50, over time, in a tax-advantageous way.

neha1101 · July 10, 2025, 8:16am

This is the reason I guess. Excellent point. The max they could do was equal weight.

Akash_Shah · July 10, 2025, 11:47am

What is the purpose of this comparison? All these weights are not fixed.
Example coal India

These are today’s weight and you are feeling happy that I got better allocation to tail nifty 50 stock in these 2 ETFs.
Tomorrow both quality ETF might decide to simply drop Coal India from their holding and
you will left with zero allocation. Then what you will do? Find new ETF?

Let me repeat, you problem statement - “I want an Index product which invests in stock of my liking with weights I like” cannot be met by an index product.
Active investing is only way out.

sandeep_cs · July 10, 2025, 11:56am

Hello @neha1101,

Just a suggestion — you could consider sharing this idea with @VishalJain ( CEO @ Zerodha Fund House) . He might explore the feasibility of launching an equal-weighted ETF based on the index in his future product rollouts.

cvs · July 10, 2025, 1:21pm

There already exist multiple ETFs tracking NIFTY 50 Equal Weight index -

The last of which appears to have the highest liquidity (~15L INR typical daily traded volume?).

Given that these products already exist, and only one of them has a significantly large daily-traded volume, the market for an additional ETF tracking the same index may be limited.

The idea being explored in this thread is slightly different:
a hypothetical NIFTY 50 inverse-weighted ETF.

The purpose of such an ETF would be to allow an investor who holds a traditional market-cap-weighted NIFTY 50 ETF, to also invest an equal sum in the NIFTY 50 inverse-weighted ETF such that the combination of the two positions would effectively create an NIFTY 50 equal-weighted portfolio.

This “NIFTY 50 inverse-weighted ETF” is a rather niche / specialized investment product, and it is likely that such an ETF would face challenges in attracting sufficient trading volume to ensure liquidity.

SG_13 · July 10, 2025, 2:44pm

Here’s the comparison of the returns (CAGR) for
NIFTY50 v/s NIFTY50 EWI

Across a 30 year period, the difference in the (CAGR) returns between the 2 indices seems to be ~1%.

So the 1% extra return from NIFTY50 EWI doesn’t seem like much, especially when we anticipate that more exposure to the tail of the Nifty50 would result in substantially higher returns.

Alternatively, this 1% excess return could make a big difference, especially when it is compounded over a long period. So, I’ll leave the interpretation of the returns to one’s own judgement.

PS:

CAGR makes sense only for lump-sum investment, that too, it’s assumed to be made at the beginning of the period.

The actual return that one makes through SIPs or regular investment would be much less than the CAGR returns provided by these indices.