Nifty IT (NIFTYIT) live share price today at NSE
What Is The Nifty IT Index?
The Nifty IT index is a sectoral index of the National Stock Exchange (NSE). The index captures the performance of the Indian IT sector and helps to gauge the overall sentiment of IT stocks. The Nifty IT index was launched with a base date of 1st Jan 1996, and its base value was revised from 1000 to 100 with effect from 28th May 2004.
As a sectoral index, the Nifty IT index tracks some of the major segments of the IT industry. These include computer software & Consulting, computer hardware & equipment, Education, IT-enabled services, and Software Products.
The Nifty IT index consists of 10 IT sector stocks, which are ranked as per their free float market capitalisation and weightage within the index. Key Nifty IT index stocks include Infosys, Tata Consultancy, HCL Tech, Tech Mahindra, Wipro, and Persistent Systems.
Nifty IT Index - Formula & Calculation
Like every other Nifty index, the Nifty IT index is also calculated using the free-float market capitalisation method. It means that the Nifty Index share price reflects the collective value of the free float market cap of all its constituents. Now let us analyse the formula for calculating the index value to understand better how the Nifty IT index works.
Nifty IT Index Formula = Free Float Market Capitalisation/ (Base Market Cap*Base Index Value)
Here,
Base index value = 100
Free float market cap = shares outstanding * IWF * capping factor * price
Free Float = Shares freely available for trading in secondary markets
IWF = Investible weight factor
The Nifty IT index is also subject to a semi-annual rebalancing, for which the cutoff dates are 31st January and 31st July of each year. For this periodic review and rebalancing (if necessary), the average data for six months ending the cut-off dates is considered.
Nifty IT Index Stocks - Eligibility Criteria
In India, NSE Indices Limited, a wholly owned subsidiary of the National Stock Exchange, is responsible for managing and operating the Nifty indices. It also defines certain eligibility criteria that companies are required to meet to get included in the Nifty indexes. You can read below to know more about the stock eligibility criteria for the Nifty IT index.
- Companies should form part of the Nifty 500 at the time of review. In case the number of eligible stocks representing a particular sector within the Nifty 500 falls below 10, then deficit number of stocks shall be selected from the universe of stocks ranked within top 800 based on both average daily turnover and average daily full market capitalisation based on previous six months period data used for index rebalancing of Nifty 500.
- Companies should fall in the IT sector.
- The trading frequency of a company must be at least 90% in the last six months.
- As of the cutoff date, the listing history of a company must be at least 1 month old.
- Ten companies must be selected based on the free float market cap. Preference is given to those shares that are available for trading on NSE’s F&O segment during the final selection.
- No single stock should weigh more than 33%, and the cumulative weightage of the top 3 stocks shall not exceed 62% at the time of rebalancing.
How Can You Invest in the Nifty IT Index?
Being a market index, it is not possible to directly invest in the Nifty IT index. Therefore, you can choose either of the following methods to invest in the index.
Manual portfolio creations
This method includes selecting and investing in the Nifty IT stocks in the same proportion and weightage as they are present in the index. By doing so, you can replicate the performance of the Nifty IT index and achieve long-term wealth creation. However, direct stock selection is a complex and capital-intensive method and therefore, is not feasible for various investors.
ETFs or index funds
Exchange-traded funds and index funds are a much easier method of investing in the Nifty IT index. ETFs and index funds are financial instruments managed by professionals who try to replicate the performance of market indices. Hence, through these instruments, you can invest in the Nifty IT index with lower capital and risk and earn returns similar to the index.
Derivative trading
Another method of transacting in the Nifty IT index is derivative trading. For investors who are comfortable with risk and market volatility in the short term, F&O trading of the Nifty IT contracts can be the right way.
Key Takeaways on the Nifty IT Index
- The Nifty Index is a sectoral index of the National Stock Exchange of India.
- It was launched by the NSE Indices Limited with a base date of 1st January 1996, and its base value was revised from 1000 to 100 with effect from 28th May 2004.
- The Nifty IT comprises 10 IT stocks and tracks the overall sentiment of India’s IT sector.
- The Nifty IT index share price is calculated using the free float market capitalisation method.
FAQs
How many companies are in Nifty IT index?
In the Nifty IT index, there are 10 IT-related stocks. Using the cumulative value of these 10 stocks based on their free float market cap, the NSE Indices Limited is able to calculate the index value.
When did the Nifty IT index start?
The official launch date of the Nifty IT index is not available. However, the index was launched with a base date of 1st January 1996 and a base index value of 1000, which was further revised to 100.
What are Nifty IT stocks in India?
Nifty IT stocks consist of some of India's major tech companies. IT giants like Infosys Ltd, TCS Ltd, HCL Tech Ltd, Tech Mahindra Ltd, Wipro, etc.
What are Nifty IT returns?
The 1-year price return of Nifty IT stands at a figure of 7.81%, and the 5-year price returns are 20.47%. Since its inception, the index has provided 22.19% returns to investors.
What is the P/E of the index?
As of 30th April 2025, the P/E of the Nifty IT index stands at 26.85, whereas the P/B ratio and dividend yield are 7.41 and 3.02, respectively.