Nifty is down 6.7% from its peak, but that barely explains the underlying churn that is being seen in the constituents that form the Nifty 50.
Nifty 50 is a Free Float Market Weighted Index which means that the weight is derived from the total market cap of non-promoter shareholding. A company with a lower market cap but higher public holding can have more weight in the Index versus a company with higher market cap but lower public holding.
The constituents of the Index are changed twice a year and while it’s not a standard criteria, greater the draw-down, higher the probability of getting chopped in the next round.
The outlier in the current set of Nifty 50 stocks is Lupin which is down 45% from its 52 week high and 63% from its all time high.
Titan is the stock with the lowest draw-down and was one of the new entries into Nifty 50 when it got reshuffled recently.
Here is the chart of all Nifty 50 stocks and their draw-downs from their 52 week highs
Note: It’s a bad idea to just buy stocks that have the most drawdown from their peaks. If you still like that strategy, there are people willing to sell you shares of Gitanjali Gems.