The Indian economy has benefited tremendously from the Information Technology (IT) industry, which has emerged as one of the largest sectors in the country. With a contribution of over 8% to the nation’s GDP, it has seamlessly become a pillar of the domestic economy. As such, Nifty IT Index is an important sectoral index in the Indian stock market, which serves as a benchmark for the IT industry. It provides investors and market intermediaries with an accurate representation of the performance of the IT segment in India.
In this article, we have compiled Nifty IT stocks list with weightage which is periodically updated. Nifty IT companies index can be used to benchmark fund portfolios, and launch index funds by mutual funds, ETFs, and structured products.
What is the Nifty IT index?
The Nifty IT Index is made up of 10 tradable, exchange-traded companies selected on the basis of free float market capitalization method. The index represents companies engaged into activities such as software development, hardware, IT infrastructure, among others. The index has a base date of 1 January 1996 indexed to a base value of 1000. The base value of the index was revised from 1000 to 100 with effect from May 28, 2004. In this article, we have compiled Nifty IT stocks list with weightage which is periodically updated.
Since the Nifty IT Index is designed to emulate the behavior and performance of the IT segment, its constituent stocks need to earn at least 50% of their revenue from IT-related services such as hardware & equipment production, IT enabled services and education in addition to the ones mentioned above.
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Nifty IT Companies Re-Balancing
Constituent companies in the Nifty IT Index are re-balanced on a semi-annual basis. The cut-off date is 31 January and 31 July of each year, i.e. For a semi-annual review of indices, average data for 6 months ending the cut-off date is considered.
A prior notice of at least four weeks is given to the market from the date of the change. As a result, changes made on 31 January will be effective from 31 March.
Index Governance
A professional team manages all NSE indices. There is a three-tier governance structure comprising the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity), and the Index Maintenance Sub-Committee.
Nifty IT Index: Key Drivers
- The biggest players in the industry including TCS, Infosys, HCL Tech, and Wipro have consistently posted strong results, effectively driving the Nifty IT index. However, this growth has come under pressure recently and the index has been down in double-digit percentages.
- Industry heavyweights have been battered disproportionately amid concerns regarding slowdown and recession in key markets including the United States and much of Europe.
- A key pillar of strength for the industry has been government support through establishment of Special Economic Zones (SEZ), tax benefits and accelerated depreciation. Much of these benefits continue as of date.
Nifty IT Index: IT Eco-System
- The Indian IT industry is almost entirely service-based with very few players following the product-led pathway.
- Since the service delivery is virtual most of the times and the business model is based on service outsourcing, it is not uncommon for the original vendor to further outsource chunks of the project to specialized players. These subcontractors are typically much smaller in size and specialize in a particular technology or domain.
Nifty IT Weightage
In terms of weightage, the top companies in the Nifty IT Stocks list are Tata Consultancy Services (26.12%), Infosys (25.23%), Tech Mahindra (9.57%), HCL Technologies (9.14%), and Wipro (8.80%).
Nifty IT Stocks List With Weightage
| Company Name | Industry | Symbol | Price (INR) | Weightage |
| Tata Consultancy Services Ltd | Information Technology | TCS | 3,312.85 | 26.12% |
| Infosys Ltd. | Information Technology | INFY | 1,487.55 | 25.23% |
| Tech Mahindra Ltd. | Information Technology | TECHM | 1,100.25 | 9.57% |
| HCL Technologies Ltd. | Information Technology | HCLTECH | 1,077.6 | 9.14% |
| Wipro Ltd. | Information Technology | WIPRO | 387.05 | 8.80% |
| LTI Mindtree Ltd. | Information Technology | LTIM | 4,722.05 | 8.31% |
| Persistent Systems Ltd. | Information Technology | PERSISTENT | 4,793.1 | 4.64% |
| MphasiS Ltd. | Information Technology | MPHASIS | 2,035.4 | 3.24% |
| Coforge Ltd. | Information Technology | COFORGE | 4,298.65 | 3.02% |
| L&T Technology Services Ltd | Information Technology | LTTS | 3,684.75 | 1.94% |
Nifty IT Index Vs Other Sectoral Indices
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Nifty IT Stocks List: Eligibility Criteria
- 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 the deficit number of stocks shall be selected from the universe of stocks ranked within the top 800 based on both average daily turnover and average daily full market capitalization on based on previous six months period data used for index rebalancing of Nifty 500.
- Companies should form a part of the IT sector.
- The company’s trading frequency should be at least 90% in the last six months.
- The company should have a listing history of 6 months. A company that which comes out with an IPO will be eligible for inclusion in the index, if it fulfills the normal eligibility criteria for the index for a 3 month period instead of 6 months.
- Final selection of 10 companies shall be done based on the free-float market capitalization. A preference shall be given to companies that are available for trading in NSE’s Futures & Options segment at the time of final selection.
- Nifty IT weightage of each stock is calculated based on its free-float market capitalization such that no single stock shall be more than 33% and the weightage of the top 3 stocks cumulatively shall not be more than 62% at the time of rebalancing.
Nifty IT Stocks List: Eligible Basic Industries
The following industries are eligible to be considered when forming companies for inclusion in the Nifty IT Index List:
- Software Development & Consulting
- Hardware & Equipment
- IT-enabled Services
- IT infrastructure
- Education
Conclusion
IT industry is an important sector in Indian economy and it weighs nearly 15% in Nifty 50 Index. Accordingly, Nifty IT is an important index but one should not pick Nifty IT stocks purely on the basis of past returns. Even though the IT industry has delivered secular growth in the past, investors need to take a good view of the industry structure and future prospects before investing.
Nifty IT Index Weightage FAQs
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How many stocks are there in Nifty IT Index?
Nifty IT Index has 10 stocks like TCS, Infosys, Tech Mahindra, and HCL Technologies.
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How frequently is Nifty IT Index rebalanced?
Nifty IT Index is rebalanced every 6 months with the cut-off dates being 31 January and 31 July of each year.
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Which company tops in Nifty IT weightage?
As on 28 February 2023, Tata Consultancy Services Ltd had the maximum weightage of 26.12%, followed by Infosys Ltd. at 25.23%.
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What is Nifty IT performance in last 12 months?
As of 28 February 2023, the index has posted a decline of 10.4% over the last 1 year. This includes dividends posted by the constituent companies.
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Can we trade in Nifty IT index?
Investors have various options to invest in traditional mutual funds and ETFs tracking the IT index. One such example is Nippon India ETF Nifty IT popularly known as Nifty BeES. Some sectoral mutual fund schemes are ICICI Prudential Technology Fund and Franklin India Technology Fund although these schemes don’t strictly follow the Nifty IT index.
