New F&O Play On Foreign Sentiment: NSE Set To Launch Equity Derivatives On Nifty India FPI 150 Index

The National Stock Exchange of India (NSE) announced in a release on July 16 that it has received the Securities and Exchange Board of India’s (Sebi) green light to launch equity derivatives on the Nifty India FPI 150 Index .

NSE is set to launch the contracts in the Equity Derivatives segment from August 12. Notably, the exchange will offer a contract cycle which will have three serial monthly index futures and index options, and the cash-settled derivatives contracts will expire on the last Tuesday of the expiry month.

What Does The Nifty India FPI 150 Index Track

The Nifty India FPI 150 Index seeks to track the performance of the top 150 stocks selected from the Nifty 500. The 150 stocks are ranked on the basis of their six-month average foreign investible free-float market capitalisation. Stocks with the highest liquidity and free-float are picked for inclusion in the index. Notably, the weight of each individual stock in the index is based on its foreign investible free-float market capitalisation, and the index is re-adjusted on a quarterly basis.

The Nifty India FPI 150 index was created to ensure accessibility and investability for foreign investors. The index was introduced on August 16, 2025. The base date for the index was set as October 03, 2022, and the base value was fixed at 1000. As of June 2026, the financial services sector makes up a major chunk of the index in terms of weightage, with a 26.15 per cent weightage. Sectors such as Oil, Gas and Consumable Fuels have a weightage of 10.03 per cent, and healthcare has a 7.51 per cent.

The top ten constituents of the index by weightage feature shares of companies like Reliance Industries, which has a weightage of 6.79 per cent, followed closely by HDFC Bank, which has a weightage of 5.31 per cent. Other Nifty FPI 150 index heavyweights include Bharti Airtel, ICICI Bank and Infosys. The remaining top constituents that make up the top ten list in terms of index weightage include Larsen and Toubro, Mahindra and Mahindra, Bajaj Finance, Axis Bank and Kotak Mahindra Bank.

How The Launch of Derivatives Trading On Nifty FPI 150 Impacts Investors

Investors who invest in Futures and Options are set to get a targeted instrument to trade based on foreign investment sentiment as soon as derivatives contracts are launched on the Nifty FPI150 index. Since the underlying index heavily weights companies with high foreign investability, traders will be able to take positions on equities that are highly sensitive to foreign institutional flows, which in turn allows domestic participants to hedge their portfolios or speculate on a basket of stocks favoured by global investors while using a single financial instrument.

Sebi’s nod for the launch of equity derivatives on the Nifty FPI 150 index comes ahead of the exchange's own anticipated Initial Public Offering (IPO). NSE officially filed its draft papers with Sebi on June 17, and the upcoming launch of these new derivatives is significant for the exchange as it generates a major portion of its total revenue from derivatives trading. Expanding its product suite can potentially help the exchange deepen market participation while also strengthening the exchange's revenue generation capabilities ahead of its D-Street debut.

Sriram Krishnan, Chief Business Development Officer, NSE, highlighted the strategic importance of the derivatives launch in expanding the exchange's available hedging tools.

"The introduction of derivatives on the Nifty India FPI 150 Index will further complement the existing index derivatives product suite," Krishnan said. "The Nifty India FPI 150 Index represents a broad and diversified segment of the Indian equity market, comprising 150 liquid stocks across multiple segments while maintaining a focus on liquidity and investability, making it a suitable underlying for hedging and portfolio diversification," Krishnan said.