BSE 500 vs Nifty 500: Same Market, Different Indices 02Jan2026
(The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)
At first glance, BSE 500 and Nifty 500 look like two different ways of measuring the same thing. Different exchanges, different methodologies, different sector labels. Yet over time, their returns and risk profiles are almost indistinguishable. This post looks at why that happens.
Both the BSE 500 and Nifty 500 are "broad-market" indices, meaning they don't just track the giant blue-chip companies (like the Sensex or Nifty 50) but also include a large number of mid-sized and smaller companies.
These two broad Indian equity indices are designed to represent the overall performance of the Indian stock market. Each includes 500 listed companies across sectors and market-cap segments, covering roughly 90%+ of India’s total market capitalisation.
For more features of the indices, see the above image.
Similarities between BSE 500 and Nifty 500 Indices:
> Number of stocks are same
> Most of the stocks are same; except some stocks
> Their return and risk characteristics are similar
> The top 10 stocks in both the indices are same
> The weights of top 10 stocks are more or less same
Interestingly, the portfolio overlap (data from thefundoo.com) between the two indices is huge — about 460 stocks are common to both, accounting for 98 per cent of the portfolio weight (you can use ICICI Pru BSE 500 ETF and Motilal Oswal Nifty 500 Index Fund to compare the portfolio overlap).
Only around 40 stocks differ, contributing a mere 2 per cent weight. This high similarity explains why both indices tend to offer almost identical returns and risk profiles.
Top 10 stocks and their weights in Nifty 500 (same top 10 stocks in BSE 500 with similar weights) >
But the sector classification, prima facie, is different.
Spotting the Subtle Differences: Sector Weights
Even though the two indices share most of their stocks, the way they classify and weight sectors introduces subtle differences. BSE and NSE follow slightly different rules for grouping companies into sectors, so the percentage weight of each sector can vary between the BSE 500 and the Nifty 500.
Take a look at the chart below — it highlights the sector weight differences across both indices.
The following image shows the sector weights of BSE 500 and Nifty 500 indices as of 31Dec2025 >
The analysis reveals >
At the aggregate level, BSE 500 and Nifty 500 look extremely similar. Financials dominate both, followed by information technology (IT), consumer discretionary, energy-related sectors and consumer-facing businesses.
The big differences are not in what the market owns, but in how sectors are grouped and labelled.
Financial services dominance:
Financial Services is the largest sector in both indices, at roughly 31 per cent weight -- reinforcing the point that Indian equity markets remain heavily bank- and NBFC-driven regardless of the index.
Sectors having same names and similar weights in both indices (see the above image):
Financial Services
Information Technology
Energy (named 'oil, gas & consumable' in Nifty 500)
Fast Moving Consumer Goods
Healthcare
Telecommunication
Utilities (named 'power' sector in Nifty 500)
Services
Diversified
Same sectors but different labelling:
Energy exposure is also very close, though NSE splits it more explicitly into “Oil, Gas & Consumables,” while BSE uses a broader “Energy” bucket.
Consumer sectors: classification is the real difference:
This is where the table looks most different at first glance. BSE 500 shows a single, large “Consumer Discretionary” block at 15 per cent. Nifty 500 breaks this same space into multiple sub-sectors—Automobiles, Consumer Services, Consumer Durables, Realty, Textiles and Media.
When combined, these largely map to BSE’s single discretionary bucket rather than indicating a true allocation mismatch.
Industrials vs capital goods and construction:
BSE 500 reports an 8.7 per cent allocation to “Industrials.” Nifty 500 splits this into Capital Goods (5.7 per cent) and Construction (2.9 per cent). Again, the difference is more about presentation and granularity than a fundamentally different portfolio.
Commodities versus materials breakdown:
BSE 500’s “Commodities” allocation (7.9 per cent) is shown as a single sector. Nifty 500 divides this into Metals & Mining, Construction Materials and Chemicals. The combined weight is broadly comparable, but Nifty offers clearer visibility into sub-sector exposures.
Bottom line: BSE 500 groups broadly; Nifty 500 slices finely. Once you mentally recombine Nifty’s sub-sectors, both indices tell the same story about the Indian equity market—with financials at the core and diversified growth around it.
Conclusion: Why They Behave Similarly and What It Means for Investors
BSE 500 groups broadly; Nifty 500 slices finely.
Despite minor differences in sector weights and classification, the BSE 500 and Nifty 500 behave almost identically when it comes to risk and returns and their economic exposure. This is because over 460 of the 500 stocks are common between them, representing 98 per cent of the total portfolio weight.
The small differences in the remaining 40 stocks contribute very little to overall volatility or performance. For investors looking to gain broad exposure to the Indian equity market, both indices are excellent benchmarks for passive investing.
Index funds or ETFs (exchange-traded funds) based on either index will capture nearly the same market movement, making them largely interchangeable for long-term portfolio building.
The choice between the two can come down to fund availability, tracking error or minor sector tilts. Ultimately, these indices offer a simple, low-cost way to participate in almost the entire Indian stock market without having to pick individual stocks.
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Additional data:
GICS vs Indian Classification:
Globally, most index providers use standard frameworks like GICS to group companies, guiding how investors view sector exposure and diversification.
In India, BSE and NSE follow different sector classifications. Both track the same market, but their grouping and labelling of companies aren’t identical.
These differences can make BSE 500 and Nifty 500 appear more different than they are. Sector names, sizes and sub-categories vary, even though most underlying stocks overlap.
Investability:
Nifty 500 is generally considered more investable because its constituents are more liquid and easier to replicate in index funds and ETFs. This is why most passive funds and derivatives-linked products prefer Nifty 500 over BSE 500.
BSE 500 has three passive funds, whereas six passive funds currently track Nifty 500 index.
BSE 500 has more than 4,500 listed stocks; whereas NSE has 2,900 listed stocks.
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References:
Portfolio overlap tool
BSE 500 factsheet
Nifty 500 factsheet
Screenshots of BSE 500 and Nifty 500 factsheets as of 31Dec2025 >
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