Nifty50 vs Nifty Next50: A-list large-caps win the bout against budding blue chips

Large-cap counters have remained underperformers so far in 2022, with the majority of blue chips struggling to remain in the positive territory.

However, the safest bets of Dalal Street, the Nifty50 counters, have outperformed the next-in-line index constituents or the Nifty Next 50 pack.

According to data from Ace Equity, Nifty50 has outperformed Nifty Next 50 Index on multiple parameters. However, the latter’s best performer has outclassed the former’s top performing stock.

Fifty shares of the NSE’s benchmark have delivered an average return of 3.43 per cent on a year-to-date basis till October 12. However, the next 49 large-cap counters have dropped 1.45 per cent during the same period.

ETmarkets.com has not considered Life Insurance Corporation of India, which was recently added in the Nifty Next 50 Index. The counter was listed in May and its year-to-date performance is not available.

About 30 companies of the Nifty50 Index have delivered positive returns so far this year, whereas only 16 constituents of the Nifty Next 50 Index have been able to perform along the same lines.

Sixteen stocks from the Nifty50 Index have delivered double- digit returns, whereas only 10 stocks from the next-in-line index have been able to do so.

Even after excluding LIC, 20 Nifty Next 50 stocks have plunged 10-51 per cent, whereas Nifty 50’s 14 stocks have tumbled between 10 and 43 per cent during the given period.

However, Nifty Next 50’s best performer is Hindustan Aeronautics, which has delivered a 95 per cent return on a YTD basis. Whereas, Nifty 50’s latest entrant, Adani Enterprises, is its best performer with 90 per cent rise.

Only two other Nifty50 stocks – Coal India and ITCs – have surged more than 50 per cent so far in 2022, whereas Nifty Next 50’s four more stocks – Adani Total Gas, Adani Transmission, Bank of Baroda and Adani Green Energy – have zoomed up to 86 per cent.





Market participants continue to remain bullish on India Inc and their outperformance over their global peers in the longer run. Some suggest that rising domestic participation is a big positive for the Indian market.

“I have always felt that in every country, including India, it is much better to have locals liking the market than foreigners because the foreigners mean hot money,” said Mark Matthews, MD, Julius Baer.

“They will run away in a crisis. It is the home buyers that every single country has to depend on,” he added. “Locals know their market the best and buy the vote of confidence, knowing what’s really going on.”

Other market biggies believe that the Indian economy is sturdy and resilient enough to outperform its global counterparts in the next decade or so.

“There is no other country in the world that has the chance of doing what India can do in the next 10-15 years. None, because no other country has the labour force dynamics that India has,” Jim O'Neill, Former UK Treasury Minister, told ETNow.

“Against that, the Indian market is pretty nicely priced relative to others, and if we get a big recovery in global markets I am pretty sure other markets will for a while outperform India,” he added.

However, not everyone is swearing by the stellar rise in the large-cap counters. A few analysts believe that mid-cap and small-cap counters are likely to outperform their larger peers in the long run.

“Over the next decade or so, India is likely to gain in dominance relative to China, when it comes to a number of sectors such as chemicals, pharmaceuticals, steel, and so on, '' said Kunal Bhakta, Investment Advisor, First Water Capital.

“Over a period of time, small- and mid-caps will continue to outperform their large-cap peers even on a risk-adjusted basis. If one can pick the right kind of businesses to back, a lot of these are likely to become large-caps over the next 3-5-7 years,” he added.

With data inputs from Ritesh Presswala

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)