For investors in the Indian stock market, there is some good news. On April 8th, the National Stock Exchange (NSE) launched four new indices. These new indices will help investors track various market sectors and assist in forming investment strategies.
So, let’s delve into understanding these new indices in detail.
Why Are These New Indices Important?
Typically, investors keep an eye on major indices like Nifty 50 and Sensex to track the overall market performance. However, often investors anticipate better performance in specific sectors. In such cases, these new sector-specific indices will help them gauge the performance of those sectors directly.
Additionally, with the help of these indices, investors can comparatively evaluate companies within those sectors when forming investment strategies.
Which Indices Are Being Launched?
Nifty Tata Group 25% Cap
This index will showcase the performance of companies listed on the NSE that are associated with the Tata Group. The index will track those 10 companies of the Tata Group whose market value constitutes 25% of the entire group.
What’s unique about this index is that no company will hold a weightage of more than 25%. Currently, companies like Tata Consultancy Services (TCS), Tata Motors, Titan Company, and Tata Steel are included in the Nifty Tata Group 25% Cap index. Among these, Tata Consultancy Services holds the highest weightage at 24.53%.
Not only that, according to Mint, since its inception, the Nifty Tata Group 25% Cap index has delivered a return of 17.34%.
Nifty500 Multicap India Manufacturing 50:30:20
This index will track the performance of selected shares from the Nifty 500 index representing the manufacturing sector. The weightage of companies included in the index will be 50% large cap, 30% midcap, and 20% small cap.
Companies like Reliance Industries, Sun Pharmaceuticals Industries, Tata Motors, and Mahindra & Mahindra will be featured prominently in this index. A total of 75 companies will be included.
Nifty 500 Multicap Infrastructure 50:30:20
This index will highlight the performance of selected large cap, mid cap, and small cap shares related to the infrastructure sector from the Nifty 500 index. A total of 75 companies’ stocks will be included in this index, and the weightage will be allocated based on free-float market capitalisation.
In this index, Larsen & Toubro, RIL, Bharti Airtel, NTPC, Max Healthcare, Power Grid Corp, UltraTech Cement, Indian Hotels, ONGC, Adani Ports and SEZ are among the top 10 companies.
Nifty MidSmall Healthcare
This index will focus specifically on midcap and smallcap companies in the healthcare sector. This will make it easier for investors to track this rapidly growing sector.
Up to 30 companies may be included in this index, selected from the ‘Nifty MidSmallCap 400’ index. Selection will be based on the average float market capitalisation of the past six months.
The most important aspect is that since its inception, this index has delivered a return of 21.33%. Companies like Max Healthcare, Lupin, Arvind Pharma, and Alembic Pharmaceuticals are major stakeholders in this index, with Max Healthcare having the highest weightage at 14.26%.
Conclusion
According to the Financial Express, NSE states that these four indices can be used as benchmarks by fund managers to compare the performance of their funds. Additionally, these indices could serve as a basis for launching index funds, exchange-traded funds (ETFs), and structured products.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The companies mentioned in the article are for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
