are selected based on their market capitalisation and trading interest which is measured by average daily turnover. The index is calculated and disseminated real-time.
NIFTY 50 is the first rung of the largest, highly liquid stocks in India. NIFTY Next 50 is an index built out of the next 50 large, liquid stocks in India. It is not as liquid as the NIFTY 50, which implies that the information in the NIFTY Next 50 is not as noise-free as that of the NIFTY 50. It may be useful to think of the NIFTY 50 and the NIFTY Next 50 as making up the 100 most liquid stocks in India. NIFTY 50 is the front line blue-chips, large and highly liquid stocks. The NIFTY Next 50 is the second rung of growth stocks, which are not as established as those in the NIFTY 50. A stock like Bosch Ltd., which recently (in May 2015) graduated into the NIFTY 50, was in the NIFTY Next 50 prior to this. NIFTY Next 50 can be viewed as an incubator where young growth stocks are found. As with the NIFTY 50, stocks in the NIFTY Next 50 are filtered for liquidity, so they are the most liquid of the stocks excluded from the NIFTY 50. Buying and selling the entire NIFTY Next 50 as a portfolio is feasible. The maintenance of the NIFTY 50 and the NIFTY Next 50 are synchronised so that the two indices will always be disjoint sets; i.e. a stock will never appear in both indices at the same time. Hence it is always meaningful to pool the NIFTY 50 and the NIFTY Next 50 into a composite 100 stock index or portfolio.