KD NEWS SERVICE
MUMBAI, July 16: The National Stock Exchange of India (NSE) has announced that it will introduce derivatives contracts on the Nifty India FPI 150 Index (NIFTYFPI) from August 12, 2026, after receiving regulatory approval from the Securities and Exchange Board of India (SEBI). The move is expected to broaden India’s equity derivatives landscape while offering foreign investors and market participants a new benchmark for hedging, portfolio management and investment strategies.
According to an official statement issued by the exchange on Thursday, the new contracts will be launched in the Equity Derivatives segment and will include three serial monthly index futures and index options contract cycles. The contracts will be cash settled, with expiry scheduled on the last Tuesday of the expiry month, in line with the exchange’s prescribed settlement framework.
The introduction of derivatives on the Nifty India FPI 150 Index marks another significant milestone in the evolution of India’s capital markets. Market experts believe that the new product will provide investors with an efficient risk management instrument while enhancing opportunities for portfolio diversification. The launch also reflects the growing maturity of the Indian derivatives market and its ability to cater to the evolving needs of domestic and international investors.
The Nifty India FPI 150 Index has been specifically designed to track the performance of the top 150 stocks selected from the Nifty 500 Index, focusing on companies that are readily accessible and investable for foreign portfolio investors (FPIs). The selection process is based on the six-month average foreign investible free-float market capitalisation, ensuring that only the most liquid and widely investable stocks are included in the index.
Unlike conventional market capitalisation-weighted indices, the Nifty India FPI 150 assigns stock weights based on their foreign investible free-float market capitalisation, making it particularly relevant for global investors seeking exposure to Indian equities while adhering to foreign investment norms.
The index offers broad-based exposure across several sectors of the Indian economy. As of June 2026, the financial services sector accounted for the largest share of the index with a weight of 26.15 per cent, highlighting the sector’s dominant role in India’s equity markets. It was followed by the Oil, Gas and Consumable Fuels sector, contributing 10.03 per cent, while the Healthcare sector held a weight of 7.51 per cent, reflecting the diversified composition of the benchmark.
The Nifty India FPI 150 Index itself was introduced on August 16, 2025, with October 3, 2022, designated as its base date and 1,000 as its base value. The methodology underlying the index is centred on foreign investible free-float market capitalisation and includes quarterly rebalancing to ensure that the index continues to accurately represent the most liquid and investable companies for overseas investors.
Commenting on the development, Sriram Krishnan, Chief Business Development Officer, NSE, said that the introduction of derivatives on the Nifty India FPI 150 Index would further strengthen the exchange’s existing suite of index derivatives.
He stated that the index represents a broad and diversified segment of the Indian equity market, comprising 150 highly liquid stocks across multiple sectors while maintaining a strong emphasis on liquidity and investability. According to him, these characteristics make the index a suitable underlying benchmark for hedging strategies as well as portfolio diversification.
Market participants believe the new derivatives product is likely to attract increased institutional participation by providing an additional avenue for managing market risk and gaining exposure to a diversified basket of Indian equities. The launch also reinforces NSE’s efforts to expand its product offerings in line with the growing sophistication of India’s financial markets and the increasing participation of global investors.
With the rollout scheduled for August 12, investors, fund managers and traders are expected to closely watch the performance of the new contracts, which could further deepen liquidity in India’s derivatives market and strengthen the country’s position as one of the world’s leading equity trading destinations.
