The National Stock Exchange of India (NSE) recently launched India’s first electric vehicle (EV) index, named the Nifty EV & New Age Automotive Index. This index will track the performance of companies operating in the electric vehicle and related sectors. Let’s delve into the details of this index.
What is the Nifty EV & New Age Automotive Index?
The Nifty EV & New Age Automotive Index has been introduced by the NSE to capitalise on the rapid changes occurring in the electric mobility space. This index specifically includes companies involved in the manufacturing of electric vehicles, battery production, charging infrastructure, and other critical components of the electric vehicle ecosystem.
The base date for this index is April 2, 2018, with a base value set at 1,000 points. It was officially launched on May 30, 2024. According to the NSE circular, a total of 33 companies are included in this index. These include Bajaj Auto, Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Exide Industries, Bosch, Samvardhana Motherson International, Eicher Motors, CG Power and Industrial Solutions, and Himadri Speciality Chemical.
Key Information About the Index
Selection Process: Companies that are part of or are about to join the Nifty 500 Index can be selected for inclusion in this new index. However, they must be involved in the manufacturing or supply of electric vehicles, modern vehicles, batteries, parts, raw materials, or related technologies.
Regular Updates: The index will be reviewed and potentially adjusted every six months, with rebalancing occurring quarterly. These reviews are scheduled for January 31 and July 31 each year. The market will be informed of any changes four weeks in advance.
Maintaining Transparency: The NSE manages all Nifty indices through an expert team, maintaining transparency with a three-tier structure that includes the Nifty Indices Limited Board of Directors, the Index Advisory Committee (Equity), and the Index Maintenance Sub-Committee.
What Does This Mean for Investors?
The Nifty EV & New Age Automotive Index offers an excellent opportunity to capitalise on the growing electric vehicle market. Through this index, investors can invest in the entire electric vehicle sector in one place. As the demand for electric vehicles in India is expected to rise rapidly, the stocks of companies included in this index are also expected to perform well.
The Nifty EV & New Age Automotive Index is not just an index but a representation of the entire electric and modern vehicle industry. Fund managers can use this index as a benchmark, and it can also lead to the launch of related index funds, ETFs, and other financial products.
Recent Changes by NSE
In recent months, NSE has launched new thematic and sectoral indices, such as the Nifty500 Multi Cap India Manufacturing 50:30:20 Index, the Nifty500 Multi Cap Infrastructure 50:30:20 Index, and the Nifty MidSmall Healthcare Index.
The Nifty EV & New Age Automotive Index can be seen as part of this strategy. Additionally, NSE has taken several steps to promote trading, such as reducing the tick size to 1 paise for stocks priced below Rs 250, decreasing the lot size for various stocks and indices, and launching the Nifty Next 50 derivative contract with no transaction charges until October 31.
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 investment advice.
*Disclaimer: Teji Mandi Disclaimer
