New Delhi, June 18 -- For most investors, the Nifty 50 is the market. It tracks India's largest listed companies, dominates passive fund flows and serves as the benchmark against which portfolios are measured.

But immediately below it sits another index that often receives far less attention. The Nifty Next 50 comprises the 50 companies ranked just below the Nifty 50 by free-float market capitalisation. These are large companies in their own right, many of them future candidates for inclusion in India's flagship index.

At first glance, the two benchmarks appear similar. Both are classified as large-cap indices, both are rebalanced semi-annually and both draw from the same universe of leading listed companies. Yet their long-term perform...