Nifty50's 20,000 points journey: From timeline to stock & sector contributions; all you need to know

20k on the Nifty is not just another number but it is history! The benchmark index Nifty hit a new peak, breaching the 20,000 level for the first time ever on Monday, September 11, extending gains for the seventh straight session. While it continued its bull run today as well, September 12, hitting another record high of 20,110.35 in intra-day deals, it settled on a muted note but in the red.

Nifty50 - from 1,000 to 20,000 mark

A recent report by NSE informed that Nifty 50, started its voyage in November 1995 with a base value of 1000 and touched 20,000 on September 11, 2023, taking 27 years, 10 months, and 8 days.

The first 1000 points rise took Nifty 9 years 1 month and 10 days. The index hit the 2000 level on December 14, 2004.

However, the next 1000-point rise took Nifty just 1 year and 2 months, taking it to the 3,000 mark on Jan 31, 2006. Then, again it took the index 1 year and 10 months each for the next two 1000 point gains. The index hit the 4000 mark on December 4, 2006, and the 5000 mark on September 27, 2007.

After that it just took Nifty a little over 3 months for the next 1000 point rise, breaching the 6,000 mark on December 11, 2007.

The journey to 7000 was one of the longest for the index, taking it 6 and a half years. Then the 8000 mark was hit in just 4 months on September 1, 2014.

However, it again took Nifty 3 and a half years for the next 1000-point rise, crossing the 9000 mark on March 14, 2017.

From 9,000, the index touched its 10k mark in just 4 months on July 26, 2017.

While the first 10k mark took almost 22 years, the second 10k took only a little over 6 years.

It hit 15k on February 8, 2021, and then in just 2 and a half years, the index climbed its last 5k points to hit 20,000.

The overall journey of the Nifty 50 index from 1000 to 20,000 has been eventful and has tied through periods of economic growth and downturn. It has created tremendous value for investors over the years.

Time taken by Nifty 50 index to add 1000 points to itself to reach from 1000 to 20,000.

Contribution by Index constituents

As per the report by NSE, from the 10,000 to 20,000 mark, there have been in all 69 unique stocks that were part of the Nifty 50 index due to various periodic inclusions and exclusions in the index.

"On an overall basis, from the 10000 mark to 20000 mark in Nifty 50, 49 out of these 69 stocks, have contributed positively while the other 20 stocks have contributed negatively to the index performance. These 49 positive contributor stocks have in all added 10,606 points to the Nifty 50 index, whereas the other 20 negative contributor stocks have taken away 606 points from the Nifty 50 index. So cumulatively these 69 stocks have added 10,000 points to the index to help it reach from 10,000 to 20,000. More specifically, Reliance Industries Ltd. has been the top contributor with 1,545 index points and Yes Bank Ltd. has been the top negative contributor with -130 index points," it observed.

It also highlighted that despite the semi-annual review of the Nifty 50 index, there are 12 companies have been in the index from the index’s inception in 1995 till date. These include the State Bank of India, HDFC (which was a part of Nifty from its inception till its merger with HDFC Bank in July 2023). HDFC Bank, Hindustan Unilever, Bajaj Auto, ITC, Tata Motors, Reliance Industries, Hindalco, Larsen & Toubro, ICICI Bank and Tata Steel.

Sectoral contribution

The report further highlighted that in its journey from the 10,000 to 20,000 mark, there have been 15 sectors that have been part of the Nifty 50 index. 14 out of these 15 sectors have contributed 10,051 points to the index while 1 sector has taken away 51 points from the index.

The Financial services sector has been the top-performing sector for the Nifty 50 index over the years and has added 3,401 points to the index journey from 10,000 to 20,000. Information Technology and Oil, Gas and consumables sectors are the next best-performing sectors for the index adding 1882 and 1545 points to the index respectively. Media, Entertainment & Publication sector is the only sector that contributed negatively taking away 51 points from the Nifty 50 index, stated NSE.

The below graph depicts the individual sector contribution to Nifty 50 in its journey from 10,000 to 20,000.

Market Cap

The full market capitalization of the companies in the Nifty 50 index has increased by 98x from ₹1.44 lakh crore in November 1995 to ₹141 lakh crore in June 2023 reporting a healthy growth rate of 18 percent CAGR.

During the same period, the overall full market capitalization coverage of the Nifty 50 companies to the total traded equities at NSE has grown from 33.7 percent to 52.4 percent. The free float market capitalization has increased from ₹1.42 lakh crore to ₹79 trillion witnessing a substantial growth in Free float market capitalization coverage of the Nifty 50 companies from an initial 33.5 percent in November 1995, to 63 percent in June 2023.

The below graph depicts the trend of full and free-float market representation and market capitalization of the Nifty 50 index.

Sector exposure

The exposure to the financial services sector has increased from 20 percent inception in 1995 to 38 percent in June 2023. The weight of Fast moving Consumer goods sector which was among one of the largest sectors of Nifty 50 in 1995 has declined from 19 percent to 9.8 percent as of June 2023. Similarly, the Metals and mining sector which was the third largest sector of the Nifty 50 in 1995 has witnessed a major decline in weight (70 percent) from 10.9 percent in 1995 to 3.5 percent in 2023. Further, the Information Technology sector which was crawling in 1995 and had no presence in the NIFTY 50 index has today emerged as one of the key drivers of the economy with its weight in the NIFTY 50 increasing to 12.7 percent in June 2023, observed NSE.

The below table depicts the sector representation of the Nifty 50 index across the years.

Annualised return and risk profile of Nifty 50 Index

Since June 30, 1999, to September 11, 2023, the total return version of the Nifty 50 index (including dividends) has delivered annualized returns of 13.9 percent with annualized volatility of 22.4 percent. Nifty 50 has delivered stable returns over the long-term horizon period in the range of approximately 13 to 15 percent, except for the last 15 years (12.1 percent), which had a base period of the pre-global financial crisis, informed NSE.

Meanwhile, the annualised volatility has been 20.2 percent over the last 15 years, 19.3 percent over the last 5 years and 10.8 percent over the last 1 year, which depicts that the volatility of the index has reduced as decreased the investment horizon period. Over the last 3 years, the Nifty 50 index had a return-to-risk ratio of 1.44, while over the last 10 years, it has been 0.86.

The below table depicts the annualised returns and risk profile of the Nifty 50 index as on September 11, 2023.

Calendar year-wise return of the Nifty 50 Index

Out of the 23 complete calendar years that the index has witnessed, the Nifty 50 index delivered positive total returns in 18 calendar years. Of these 18 calendar years, the Nifty 50 delivered greater than 30 percent returns in 7 calendar years out of which for 3 calendar years the returns have been greater than 50 percent, the report pointed out.

The below graph depicts the calendar year-wise performance of the Nifty 50 index.