NSE Gets SEBI Nod to Launch Nifty India FPI 150 Derivatives from August 12, 2026

The National Stock Exchange of India (NSE) has received approval from the Securities and Exchange Board of India (SEBI) to introduce derivatives on the Nifty India FPI 150 Index. The new contracts will be launched in the equity derivatives segment from August 12, 2026, providing domestic and foreign investors with an additional tool for hedging and portfolio management.

The Nifty India FPI 150 Index tracks the performance of 150 stocks selected from the Nifty 500 universe based on their accessibility and investability for foreign portfolio investors (FPIs). Constituents are selected using their six-month average foreign investible free-float market capitalisation, which reflects the value of shares available to foreign investors after excluding restricted holdings. The weight of each stock in the index is also determined using this metric, giving greater representation to companies with larger foreign investible free-float.

The index was launched on August 16, 2025, with a base date of October 3, 2022, and a base value of 1,000. It is rebalanced every quarter to keep the portfolio aligned with market liquidity and foreign investment eligibility. As of June 2026, the financial services sector accounted for 26.15 per cent of the index, followed by oil, gas and consumable fuels at 10.03 per cent and healthcare at 7.51 per cent.

Under the approved framework, NSE will introduce both index futures and index options on the Nifty India FPI 150 Index. The exchange will maintain three serial monthly contracts at any point in time. All contracts will be cash settled, meaning there will be no physical delivery of the underlying securities. Instead, settlement will be based on the difference between the contract price and the closing value of the index on the expiry date.

The contracts will expire on the last Tuesday of every expiry month, making them different from several existing NSE index derivatives that expire on Thursdays. Cash settlement is the standard mechanism for index derivatives as it simplifies settlement without requiring the delivery of a basket of shares.

The Nifty India FPI 150 Index has been specifically designed to address the needs of foreign portfolio investors by focusing on stocks with high foreign investible free-float and liquidity. Since foreign investors operate within ownership limits and regulatory restrictions, the index represents companies where large institutional positions can be built or exited efficiently. The derivatives based on this index are expected to offer a hedging instrument that more closely reflects the portfolios typically held by FPIs.

The National Stock Exchange of India is the country's largest stock exchange by trading volume and operates across equities, equity derivatives, currency derivatives, interest rate derivatives and debt markets. It also manages the Nifty family of indices, which serve as benchmarks and underlying assets for a wide range of investment products in India and overseas.

The introduction of derivatives on the Nifty India FPI 150 Index expands NSE's suite of index-based products and offers market participants another avenue to manage portfolio risk. The contracts are expected to provide an efficient hedging mechanism tailored to the investment requirements of foreign institutional participants while also being available to domestic investors when trading begins on August 12, 2026.

Disclaimer: The article is for informational purposes only and not investment advice.