NSE introduces four new Indices

Starting today, ie 8th April 2024, you will see four more indices by National Stock Exchange (NSE). The four new indices are Nifty Tata Group 25 percent Cap, Nifty 500 Multicap Infrastructure 50:30:20, Nifty 500 Multicap India Manufacturing 50:30:20, and Nifty MidSmall Healthcare. These indices will be available in the capital market and F&O (Futures and Options) segment. Let us look at the details.

Four New Indices: Details

Nifty Tata Group 25% Cap

It comprises ten companies and is determined using the free float market capitalization method. Some of the big names include TCS, Tata Motors, and Titan. It will offer you exposure to the performance of Tata Group companies.

Nifty500 Multicap India Manufacturing 50:30:20

This index is designed to monitor the performance of large-cap, mid-cap, and small-cap stocks embodying the manufacturing theme within the Nifty 500 index. The index has a total of 75 stocks. It allocates weights based on free-float market capitalization, with large-caps at 50%, mid-caps at 30%, and small-caps at 20%. The top constituents of the index are Reliance Industries, Sun Pharma, and Tata Motors.

Nifty500 Multicap Infrastructure 50:30:20

This particular index reflects the performance of selected large-cap, mid-cap, and small-cap stocks from the Nifty 500 index with a focus on the infrastructure theme. It is similar to the above index, as it has 75 companies and allocates weights based on free-float market capitalization. Larsen & Tourbo, Reliance Industries, and Bharti Airtel.

Nifty MidSmall Healthcare

This index monitors mid-cap and small-cap stocks within the healthcare sector, comprising up to 30 stocks drawn from the Nifty MidSmallcap 400 index. Stocks are chosen based on their free-float market capitalization, providing investors with exposure to the healthcare segment’s performance. The top constituents of the index are Lupin Limited, Max Healthcare Institute, and Aurobindo Pharma.

What do these new indices mean to investors?

With four new indices, we will give a more comprehensive approach to participating in India's economic growth. Concerning Tata Group companies, we can see a significant influence of Tata Group companies on the Indian stock market. The competitive intensity has increased due to BSE offering various products in its F&O segment. These additions would provide a competitive advantage to the NSE and help it garner market share going forward. Also, the increasing investor interest in the manufacturing theme due to the revenue visibility and stable government policies should garner market interest as it allows broader market participation in the sector.