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NSE to launch derivatives on Nifty Next 50 index from April 24

NSE to launch derivatives on Nifty Next 50 index from April 24

On April 18, 2024, the National Stock Exchange of India (NSE), in a circular shared on its official website, announced that the exchange will launch futures and options contracts (F&O) on the Nifty Next 50 index from April 24. The NSE Nifty Next 50 index, which was introduced on January 1, 1997, represents 50 companies from the Nifty 100 after excluding the members of the headline Nifty 50 index. The expiry day is set for the last Friday of the expiry month, and if the last Friday is a trading holiday, then the expiry day is the previous trading day.

The NSE's move for a new derivative product is seen as part of a series of steps to regain some of the market share it lost to rival BSE over the last year. Although NSE has historically been a dominant player in the F&O segment, BSE saw its market share rise from 0.1% in May 2023 to 7.4% in March 2024. Currently, only Sensex F&O contracts expire on the last trading day of the week.

Although the stocks contained in the Nifty next 50 are volume stocks, according to market experts, the move will not have much impact on BSE Sensex volumes because it usually takes 4-6 months for a new product to gain some momentum. By the time that happens, it is likely that BSE will launch more products.

Over the last month, India's largest stock exchange has announced several steps likely aimed at arresting market share loss, including a reduction in transaction charges by 1% from April, halving the lot size for Nifty 50 F&O contracts from 50 to 25, and reducing lot sizes for two other indices.

Nifty Nest 50 Stocks LTP Weightage 52W High 52W Low
LICI 973.3 8.604 % 1,175.00 543
DMART 4,696.00 4.262 % 4,831.85 3,352.00
ADANIGREEN 1,770.05 3.983 % 2,018.95 815.55
HAL 3,751.30 3.482 % 3,768.00 1,370.25
JIOFIN 370.1 3.402 % 384.4 202.8
IOC 166.65 3.378 % 196.8 77.7
ADANIPOWER 594.55 3.272 % 646.9 185.2
DLF 855.65 3.000 % 967.6 402
SIEMENS 5,589.50 2.815 % 5,770.00 3,240.00
IRFC 141 2.626 % 192.8 27.75
VBL 1,396.10 2.571 % 1,561.95 687.5
BEL 233.3 2.392 % 238 100.4
ZOMATO 189.2 2.312 % 199.7 53.2
PIDILITIND 2,830.70 2.067 % 3,074.00 2,292.55
TRENT 4,158.95 2.060 % 4,243.95 1,306.20
VEDL 385.95 2.047 % 394.75 208
PNB 128.25 2.020 % 138.3 47.8
INDIGO 3,560.20 1.962 % 3,830.45 1,950.00
TATAPOWER 428.1 1.945 % 444.2 193.05
ABB 6,292.60 1.910 % 6,773.10 3,141.15
BANKBARODA 256.95 1.897 % 285.6 172.8
GAIL 201.95 1.895 % 213.65 102.95
PFC 398.65 1.848 % 477.8 124.64
AMBUJACEM 609.65 1.733 % 640.8 373.35
GODREJCP 1,168.85 1.683 % 1,314.30 897
ADANIENSOL 1,040.60 1.640 % 1,250.00 686
RECLTD 425.75 1.599 % 524 121.05
CANBK 578.75 1.499 % 618.95 291.35
ATGL 912.4 1.432 % 1,259.40 522
ZYDUSLIFE 922.15 1.334 % 1,031.70 484.95
CHOLAFIN 1,128.15 1.333 % 1,310.00 823.15
HAVELLS 1,501.70 1.327 % 1,591.35 1,193.20
JINDALSTEL 927.25 1.308 % 936 503
TVSMOTOR 1,899.05 1.304 % 2,313.45 1,084.00
DABUR 504.2 1.265 % 597.1 489.2
BOSCHLTD 29,787.00 1.249 % 31,400.15 17,931.15
SHREECEM 24,368.75 1.248 % 30,737.75 22,605.60
BAJAJHLDNG 7,835.70 1.247 % 9,348.95 6,265.05
ICICIPRULI 588.15 1.226 % 640.85 420
TORNTPHARM 2,539.40 1.221 % 2,744.00 1,580.00
MOTHERSON 127.05 1.208 % 129.95 68.1
ICICIGI 1,689.75 1.193 % 1,747.00 1,055.00
MCDOWELL-N 1,123.10 1.185 % 1,207.00 754.25
IRCTC 992 1.124 % 1,068.80 594.7
SRF 2,529.05 1.063 % 2,687.50 2,040.00
NAUKRI 5,712.10 1.048 % 6,355.00 3,592.30
COLPAL 2,649.65 1.027 % 2,815.90 1,520.05
SBICARD 732.1 0.976 % 933 678.9
MARICO 505.3 0.929 % 595 462.7
BERGEPAINT 504.55 0.852 % 679.75 478.16

 

The Nifty Next 50 derivative contracts will have a lot size of 10, and at any given time, three serial monthly contracts will be available for trading.  On April 24, Nifty will roll three monthly contracts for trading i.e. May, June, and July.

As of March 2024, three sectors held the maximum weightage in the Nifty Next 50 index:

  • Financial services sector: 23.76%
  • Capital goods sector: 11.91%
  • Consumer services: 11.57%
  • Fast Moving Consumer Goods: 10.62%

The market capitalisation of Nifty Next 50 index constituents stood at Rs 70 lakh crore, representing about 18 % of the market value of the NSE-listed stocks, as of March 29, 2024.

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