India on Wednesday celebrated the Silver Jubilee of Nifty 50 Index and 20 years of derivatives in Indian capital markets. The Nifty 50 Index was launched on April 22, 1996 and has completed 25 successful years.
Annualized return over 25 years of 11.2%
The index, which represents the 50 major capitalized and liquid equities across 13 sectors, has grown 15 times in 25 years and has delivered annual returns over 25 years of 11.2%.
The Nifty 50 Index was the first underlying benchmark on which the first Exchange Traded Fund (ETF) was launched in India and was also the first index on the NSE’s derivatives market. As of November 30, 2021, Assets Under Management (AUM) of passive products tracking the Nifty 50 index was $ 25 billion.
The NSE began trading in derivatives with the launch of the Index Futures benchmarked to the Nifty 50 Index on June 12, 2000 in the equity derivatives segment. This was followed by the introduction of index options trading (also based on the Nifty 50 index) on June 4, 2001, options on individual securities from July 2, 2001, and futures on individual securities from November 9, 2001.
“The NSE has been the largest derivatives exchange globally for two consecutive years in 2019 and 2020, and the index option contract on the Nifty 50 Index was the largest traded contract globally for several years,” it read in a press release.
“The equity derivatives market has provided an effective risk management framework for investors and has also accelerated the growth of the underlying cash equity segment. In the last 10 years, volumes in the cash equity segment of equities available in derivatives have increased 5.5 times in line with single equity derivatives which have increased 5, “The availability of derivatives is one of the criteria used by various investors, especially institutional investors, for the basis of their investment in a security or an asset class in a jurisdiction,” it added.
Who said what?
Piyush Goyal, Minister of Trade and Industry, Consumer Affairs, Food and Public Distribution and Textiles, was the main guest on this significant occasion. Piyush Goyal said: My best wishes to the National Stock Exchange on the Silver Jubilee of Nifty 50 Index and 20 years of launching derivatives.
Ajay Tyagi, SEBI Chairman, said: “The NSE has made many important contributions over the years to the development of the Indian capital markets. It has achieved a global status and distinguished itself worldwide by being the largest derivatives exchange globally in two consecutive years in a row – in 2019 and 2020. I urge the stock exchange to continue its efforts to be innovative, bring in best global practices and further build confidence in investors and issuers in Indian capital markets. ”
Vikram Limaye, MD & CEO, NSE said: “On behalf of the National Stock Exchange, I would like to express my gratitude to the Government of India, the Securities Exchange Board of India and the Reserve Bank of India along with all stakeholders for their support over the last 25 years. As India emerges from the ongoing pandemic, the NSE will continue to focus on providing a robust platform to raise capital and deliver effective risk management products.As a front-line regulator, the NSE will continue to focus on disciplined market development and the best interests of investors and issuers interest, and to further strengthen confidence in the markets. “