Why Is Adani Green Not in Nifty 50?

The Nifty 50 is a benchmark stock index on the National Stock Exchange (NSE), representing the top 50 companies based on market capitalisation, liquidity, and other eligibility criteria. The index serves as a key indicator of the Indian equity market’s performance.

Adani Green’s Market Standing

Adani Green Energy Ltd. (AGEL) is one of India’s largest renewable energy companies, with a market capitalisation that often surpasses that of some Nifty 50 constituents.

Given its size and prominence in the energy sector, many investors wonder why AGEL has not yet been included in the Nifty 50 index.

Eligibility Criteria for Inclusion in Nifty 50

Despite its large market cap, Adani Green does not meet all the necessary eligibility criteria for inclusion in the Nifty 50. Here are some key reasons:

1. Free-Float Market Capitalisation

• While Adani Green has a high total market capitalisation, Nifty 50 considers free-float market capitalisation (i.e., shares available for public trading, excluding promoter holdings).
• AGEL has a high promoter shareholding, reducing its free-float market cap, which is an important factor for index inclusion. As of December 31, 2024, promoters held 60.94% of AGEL’s shares, leaving only 39.06% available for public trading.

2. Liquidity Criteria

• Nifty 50 requires a minimum average impact cost of 0.50% or less for 90% of the observations in the past six months.
• Impact cost measures how much buying or selling a stock affects its price; a highly liquid stock has a lower impact cost.
• As of March 26, 2025, AGEL had an impact cost of 0.10%, which meets this requirement. However, impact cost must remain consistently low over a six-month period for consideration.

3. Derivatives (F&O) Eligibility

• To be included in Nifty 50, the stock must be eligible for trading in the Futures & Options (F&O) segment on the NSE.
• AGEL is part of the Nifty Next 50 index, meaning it trades in the F&O segment, fulfilling this requirement.

4. Minimum Listing History

• The company must be listed for at least one month before the cutoff date for review.
• Adani Green Energy Ltd has been listed since June 18, 2018, easily surpassing this requirement.

Conclusion

Despite its strong market presence, Adani Green Energy Ltd. is not yet a part of the Nifty 50 index due to factors like low free-float market cap, liquidity constraints, and trading volume requirements. Investors should monitor future changes in these metrics to assess the possibility of AGEL’s inclusion in the benchmark index.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.