How the Nifty50 Has Evolved Over 30 Years
In this blog, we’re looking at how the Nifty50 has transformed since its inception in 1996. When it was first formed, the list included many companies that either no longer exist or have faded into obscurity. Names like Brook Bond, Indo Gulf Chemical, CPCL, Grace, Ponds, Hindalco (as it was known then), and even Reliance Capital were part of the top 50. Some of these companies got merged, delisted, or simply lost their large-cap status over time.
Only a Few Survivors From the Original List
Fast forward to now, only a small fraction of those original 50 companies remain in the index. The rest have been replaced by new-age giants or better-performing businesses. This kind of turnover—nearly 80% in under 30 years—proves how dynamic the market is and how staying static with your investments can be dangerous. If someone had simply bought and held the original Nifty50 names, assuming they were the “bluest of blue chips,” they would have been in for a rude shock.
The Nifty Index Is a Built-In Momentum Portfolio
This evolution clearly shows that the Nifty50 itself behaves like a momentum portfolio. Underperformers are automatically weeded out over time and replaced by stronger companies with rising market caps. The idea is to keep the index relevant and in sync with the most valuable businesses in India at any point in time.
Why You Should Apply the Same Principle to Your Portfolio
If the index itself is functioning like a momentum strategy, isn’t it worth asking: why shouldn’t your personal investment strategy follow a similar principle? If your portfolio is built to stay with strength and move away from weakness—whether using data or a rules-based approach—you are far more likely to stay aligned with long-term market winners.
WeekendInvesting launches – The Momentum Podcast
Join Yassar, a Dubai-based engineer turned investor, as he shares his 15-year journey—from Wall Street dreams to mastering systematic trading. In this debut episode, Yassar and Alok dive into real estate, gold, crypto, and key lessons for navigating markets.
