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NSE Launches India's First Electric Vehicle Index

ICICIdirect 8 Mins 20 Jun 2024

Many investors complain that we don't have sufficient index funds in India. It is changing with time. With every passing quarter, we see the count of index funds increasing. Recently, the National Stock Exchange (NSE) launched India's first electric vehicle index. The index will track the performance of companies that operate in EV and related sectors. The index is called the Nifty EV & New Age Automotive Index. Let us look at the details and see if this is one you should put your money in.

Nifty EV & New Age Automotive Index: Background

The Nifty EV & New Age Automotive Index, launched on May 30, 2024, by the NSE, marked a significant milestone for the Indian electric vehicle industry. The index serves as the first thematic benchmark to track the performance of companies shaping the future of electric and new-age mobility in India.

The Indian government's strong push for EV adoption, coupled with the increasing demand for sustainable transportation solutions, has fueled the growth of the domestic EV ecosystem. The Nifty EV & New Age Automotive Index emerged in response to this growing market. It provides investors with a structured way to participate in this exciting space.

Details of NSE Electric Vehicle Index

The index aims to track the performance of the companies that are active in electric vehicles or new age automotive vehicles segment. What are new-age automotive companies? The companies that work with hybrid, hydrogen fuel-based vehicles, and green hybrid vehicles.

The index includes manufacturers of electric vehicles, new age automotive vehicles, electric batteries; electric vehicles or electric battery component producers, companies that produce or supply raw materials that are relevant to the electric vehicle and autonomous vehicle technology segment, companies that build autonomous vehicles, and suppliers of autonomous vehicle technologies.

The Nifty EV index base date is set as '2 April 2018' with a base value set at 1,000. Before moving forward, let us understand the base date. The base date for an index fund is the specific date chosen as the starting point for the index's calculation. It represents the date on which the index is set to a predefined base value (1,000 in this case) to provide a reference point for measuring the index performance over time.

Here is the sector representation of the fund:

Sector

Weight(%)      

Automobile and Auto Components

73.65

Information Technology

10.64

Chemicals

9.62

Capital Goods

7.21

Oil, Gas & Consumable Fuels

3.18

Consumer Services

0.17

Objective of the NSE EV Index

We can summarize the objective of the NSE EV index through three points. Let us look at each in detail:

Track performance of the EV ecosystem: The primary objective is to track the performance of companies that are part of the entire EV ecosystem in India. It goes beyond just car manufacturers and encompasses a wider range of players.

Facilitate investment in the EV market: The index aims to create a structured and transparent way for investors to gain exposure to the growing EV sector in India. Picking individual stocks from a sector, even after knowing it is growing, requires skill. By investing in a fund or product based on this index, investors can participate in the potential growth of the EV market without having to pick individual stocks.

Highlight the EV Sector and attract investment: The launch of the index signifies the growing importance of EVs in the country and can serve as a tool to attract further investments into the sector. As mentioned above, it also aligns with the Indian government's push for EV adoption and can benefit the overall growth of the domestic EV industry.

Top EV companies in India

Let us look at the top constituents of the fund that will give you an idea of the top EV companies in India as of now. Below are the top companies in the index with their percentage and their current market share (as of June 12, 2024):

Company's Name

Weight(%)

Market Cap

Bajaj Auto Ltd.

6.98

Rs 2,49,815 crore

Mahindra & Mahindra Ltd.

6.55

Rs 3,09,045 crore

Tata Motors Ltd.

5.74

Rs 3,52,184 crore

Samvardhana Motherson International

4.95

Rs 94,971 crore

Maruti Suzuki India Ltd.

4.93

Rs 4,08,737 crore

CG Power and Industrial Solutions Ltd.

4.83

Rs 98,851 crore

Exide Industries Ltd.

4.78

Rs 40,353 crore

Bosch Ltd.

4.56

Rs 90,958 crore

Hero MotoCorp Ltd.

4.51

Rs 1,02,330 crore

Eicher Motors Ltd.

4.39

Rs 1,33,650 crore

Summary of NSE's thematic indices

The National Stock Exchange offers a variety of thematic indices alongside the popular Nifty 50 and sectoral indices. These thematic indices group companies based on specific themes or trends, allowing investors to target investments in areas of particular interest. Here is the list of different thematic indices offered by NSE:

  • Nifty Commodities Index
  • Nifty Core Housing Index
  • Nifty CPSE Index
  • Nifty EV & New Age Automotive Index
  • Nifty Energy Index
  • Nifty Housing Index
  • Nifty India Consumption Index
  • Nifty India Defence
  • Nifty India Digital
  • Nifty India Manufacturing Index
  • Nifty Infrastructure Index
  • Nifty Midcap Liquid 15 Index
  • Nifty MidSmall India Consumption Index
  • Nifty MNC Index
  • Nifty Mobility
  • Nifty PSE Index
  • Nifty REITs & InvITs Index
  • Nifty Non-Cyclical Consumer Index
  • Nifty Services Sector Index
  • Nifty Shariah 25 Index
  • Nifty100 Liquid 15 Index
  • Nifty50 Shariah Index
  • Nifty500 Shariah Index
  • Nifty500 Multicap India Manufacturing 50:30:20 Index
  • Nifty500 Multicap Infrastructure 50:30:20 Index
  • Nifty SME EMERGE
  • Nifty Transportation & Logistics
  • Nifty100 ESG
  • Nifty100 Enhanced ESG
  • Nifty100 ESG Sector Leaders Index

Before you go

If you also believe that EV is the future but, as of now, unable to find the right stocks from the sector, this is perhaps what you need - the EV index. Do note that the companies mentioned above may change as the index will undergo semi-annual reconstitution and quarterly rebalancing. It is to ensure the index's relevance and accuracy in tracking the fast-changing EV market landscape.

Enjoy the new Native experience

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