Inside the Nifty 500 Index: How It Changed from 2021 to 2026 28Jul2026
(This is my 529th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.
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.)
1 Introduction
The Nifty 500 tracks 500 of India's listed companies across large-cap, mid-cap and small-cap segments. Together, they represent a large part of the country's stock market.
The index changes every six months as companies grow, shrink or become more valuable. Looking at six years of data shows how India's corporate landscape has evolved.
Three trends stand out. The biggest companies have become less dominant. Sector leadership has shifted. Yet a handful of companies have remained at the top throughout.
2 Top 10 companies in the Nifty 500 by weight (June 2021 to June 2026)
(click on the chart to view better)
The biggest companies no longer dominate:
The largest companies still lead the index. But they account for a much smaller share than they did six years ago.
In June 2021, the top 10 companies made up 39.2 per cent of the Nifty 500. By June 2026, their share had fallen to 29.9 per cent.
The top five companies also became less dominant. Their combined weight declined from 27.5 per cent to 21.1 per cent.
This means the index has become broader. More companies now contribute to overall market performance.
The Nifty 500 has become less concentrated over the past six years, reducing concentration risk.
Banks have taken the lead:
Leadership within the top 10 has also changed.
Reliance Industries was the largest stock in Jun2021. By Jun2026, HDFC Bank had taken the top position, followed by ICICI Bank.
HDFC Ltd, one of the largest companies in the index, merged with HDFC Bank in Jul2023. While the merger created India's largest private sector bank, its weight has gradually declined since then as the bank dealt with post-merger integration, business headwinds and increased investor scrutiny following corporate governance-related developments.
As of Jun2023, the combined weight of HDFC Bank and HDFC Ltd was 10.7 per cent, but three years later it got slashed to just 6.2 per cent, highlighting the troubles the merged entity has faced over the past three years.
Bharti Airtel climbed steadily and entered the top four by 2026.
State Bank of India also moved into the top 10 after being outside it for much of the period.
Meanwhile, Infosys, TCS, ITC and Kotak Mahindra Bank now account for a smaller share of the index than they did a few years ago.
These changes reflect how investor preferences have shifted over time.
3 Weight trends of companies that appeared in the Nifty 500 top 10 at least once between 2021 and 2026
(click on the chart to view better)
Some companies stay at the top for years:
Although the rankings change every year, very few companies manage to stay among the leaders.
Only five companies remained in the top 10 throughout all six years.
They are HDFC Bank, ICICI Bank, Reliance Industries, Larsen & Toubro and Infosys.
Across the six-year period, only 13 companies appeared in the top 10 even once.
This is interesting. Market leadership changes, but it changes gradually. The same group of companies continues to dominate, even as their rankings shift.
4 Top sector weights in the Nifty 500 (June 2021 to June 2026)
(click on the chart to view better)
Sector leadership is changing:
Financial Services remained the largest sector throughout the period.
Its weight increased from 30.4 per cent in June 2021 to 31.6 per cent in June 2026. Banks and other financial companies have become even more important to the Indian market.
Information Technology tells the opposite story.
Its weight fell sharply from 13.3 per cent to 5.7 per cent over the same period. This reflects the weaker performance of large IT companies after the strong gains seen during and immediately after the pandemic.
New sectors are gaining importance
Several sectors increased their presence in the index.
Capital Goods nearly tripled its weight over six years. Healthcare also expanded. Automobile and Auto Components strengthened steadily.
Telecommunication entered the top 10 sectors by 2025, helped by Bharti Airtel's rise.
The market is becoming more balanced across industries instead of relying on just a few sectors.
The index is more diversified today
The biggest sectors also account for a smaller share of the index than before.
The top three sectors represented 53.1 per cent of the index in June 2021. By June 2026, they accounted for 46.2 per cent.
The top five sectors declined from 65.9 per cent to 60.4 per cent.
Just as the biggest companies have become less dominant, the market has also become less dependent on a handful of sectors.
5 Final takeaway
The Nifty 500 of 2026 looks quite different from the one in 2021.
Banks have strengthened their position. Technology has lost some of its dominance. Infrastructure, healthcare and manufacturing-related sectors have become more important.
At the same time, the index has become less concentrated. The largest companies and sectors now occupy a smaller share of the market than they did six years ago.
Perhaps the biggest lesson is that markets evolve continuously. Some companies rise, others fall, and new leaders emerge.
A broad index such as the Nifty 500 captures these changes and provides a useful window into how India's economy is changing.
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References:
Nifty 500 factsheet
Rupee Vest Motilal Oswal Nifty 500 Index Fund
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Additional notes:
Rebalancing frequency: The Nifty 500 is reviewed and rebalanced twice a year, with changes taking effect at the end of March and September. The June snapshots used in this article therefore reflect the March rebalancing for that year.
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