BSE Fast Moving Consumer Goods

S&P BSE FMCG Index Share Price

The S&P BSE Fast Moving Consumer Goods Index, i.e. the  Nifty FMCG Index, is intended to represent the performance and behaviour of fast-moving consumer goods, or FMCGs, which are mass-market, non-durable items that are readily available off the shelf. Fifteen FMCG stocks listed on the National Stock Exchange (NSE) make up the Nifty FMCG Index. 

History of S&P BSE FMCG Index

FMCG is one of the most influential industries since it connects with consumers from all socioeconomic backgrounds. Therefore, it is critical to examine the performance and dynamics of this industry. In April 2015, BSE introduced the BSE FMCG index to meet this demand. One of the eleven macroeconomic variables that it examines is mobility within the FMCG sector.

Constituents of S&P BSE FMCG Index

All stocks that are included in the BSE All Cap Index that fall within the FMCG category are included in this index. There are now 81 constituents on the S&P BSE FMCG list. Using the free-float market capitalization method, these stocks are ranked. Nevertheless, the maximum weightage of the top stocks is capped to determine the final index value.

Every year in September, the components that make up the S&P BSE FMCG Index are rebalanced. However, an assessment of the index is carried out in December, March, and June of each quarter to account for any modifications to the constituents.

Top Constituents by Weightage:

• ITC Ltd.: 34.93%
• Hindustan Unilever Ltd.: 19.31%
• Nestle India Ltd.: 7.01%
• Tata Consumer Products Ltd.: 6.21%
• Varun Beverages Ltd.: 6.06%
• Britannia Industries Ltd.: 5.46%
• Godrej Consumer Products Ltd.: 4.36%
• Colgate Palmolive (India) Ltd.: 3.64%
• United Spirits Ltd.: 3.29%
• Dabur India Ltd.: 2.97%

Eligibility Criteria for Selection of Stocks: 

• Businesses should be included in the Nifty 500 at the time of the evaluation. If, according to data from the previous six months, the number of eligible stocks in a given sector represented by the Nifty 500 falls below 10, then a deficit number of stocks will be chosen from the universe of stocks ranked within the top 800 based on both average daily turnover and average daily full market capitalization for Nifty 500 index rebalancing.
• Businesses ought to be involved in the FMCG industry.
• Over the previous 6 months, the company's trading frequency should have been at least 90%.
• As of the deadline, the company must have a minimum of one month's listed history.
• The last fifteen companies will be chosen based on their free-float market capitalization.
• At the time of rebalancing, the weight of each stock in the index is determined by taking its free-float market capitalization into account. This ensures that no single stock has a weight greater than 33% and that the weight of the top three stocks combined is not greater than 62%.

Should You Invest in the BSE FMCG Index?

Market risk refers to the fluctuating stock prices, which investors consider to be inherent in stock markets and hence riskier. However, portfolio diversification helps bring down market risk. Investing in the BSE FMCG companies would therefore automatically lead to diversification of the portfolio because it consists of several stocks related to the FMCG sector. It is therefore considered as a safer choice for investing.