The National Stock Exchange of India (NSE) is poised to unveil derivatives linked to the Nifty Next 50 index (NIFTYNXT50) on April 24, 2024. Following regulatory green light from the Securities and Exchange Board of India (SEBI), NSE aims to diversify its derivatives portfolio, catering to investor demand for innovative financial instruments.
The NIFTYNXT50 derivatives will encompass three serial monthly index futures and index options contract cycles, all settled in cash and scheduled to expire on the last Friday of each expiry month. This index, representing a selection of 50 companies from the Nifty 100, excluding the Nifty 50 constituents, showcases substantial sector representation, particularly in financial services, capital goods, and consumer services.
Since its inception on January 1, 1997, the Nifty Next 50 index has undergone methodological refinements, including revisions to computation methodologies and weight capping. With a combined market capitalization of Rs 70 trillion as of March 29, 2024, constituting about 18% of the total market capitalization of NSE-listed stocks, the index holds considerable weight in the market. Sriram Krishnan, Chief Business Development Officer at NSE, expressed enthusiasm for the impending launch, highlighting the NIFTYNXT50 derivatives’ role in complementing NSE’s existing index derivatives product suite. This move underscores NSE’s commitment to fostering a dynamic and diverse investment landscape, aligning with evolving market demands and investor preferences.
