An investor while selecting portfolio with the objective of minimisation of risk and high return faced various constraints like dividend, good return, earning per share, company and industrial diversification and also he wants sufficient liquidity etc. An attempt is made to incorporate various relevant factors for developing and testing of efficient portfolio model for construction of portfolio. Secondary data is used for the companies listed in Nifty 50 index. Regression analysis, granger causality test, portfolio optimisation is undertaken for the formation of portfolio and evaluated by Sharpe and Treynor ratio. It is found that as compared to market trend portfolio, Proposed portfolio model performed better.

KEY WORDS: Portfolio, earning per share, dividend, diversification, liquidity.