Overview: The FinNifty index, a segment of the Nifty Financial Services Index, offers insights into the performance of India's financial landscape. The index encapsulates a range of financial institutions, including banks, NBFCs, housing finance companies, insurers, asset managers, credit card firms, and other financial service providers. It is composed of 20 stocks traded on the National Stock Exchange (NSE) and was launched in September 2011 with a base date of January 1, 2004. The index is subject to a semi-annual rebalancing, scheduled for January 31 and July 31 annually.

To qualify for the FinNifty Index, financial firms must be within the Nifty 500. Additionally, no individual stock can constitute more than 33% of the index, and the aggregate weightage of the top three stocks is capped at 62% during rebalancing. Key players in the FinNifty Index include HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, State Bank of India, Bajaj Finserv, Bajaj Finance, HDFC Life, SBI Life, and Shriram Finance.

In January 2021, the NSE introduced futures and options (F&O) contracts based on the Nifty Financial Services Index, using FinNifty as the underlying index for these derivatives. Settlements for these derivatives occur on the last Tuesday of the expiry period; if this falls on a holiday, the preceding business day serves as the expiration date. FinNifty Index Options offer both weekly and monthly expirations, while FinNifty Index Futures are settled monthly. The lot size for trading FinNifty stands at 40.