Nifty Commodities Index
The National Stock Exchange (NSE)'s NIFTY Commodities is a real-time thematic index that monitors the performance of the commodities sector in the Indian economy. It comprises 30 stocks across five sectors: Oil, Gas & Consumable Fuels (26.64%), Metals & Mining (22.5%), Construction Materials (19.48%), Power (16.25%), and Chemicals (15.13%).
The index includes industries such as Aluminium, Copper & Zinc Products, Cement & Cement Products, Carbon Black, Coal, Commodity Chemicals, Electric Utilities, Ferro & Silica Manganese, Iron & Steel, Fertilizers, and Industrial Minerals. Additionally, it comprises Jute & Jute Products, Oil E&P, Paper & Paper Products, Pesticides & Agrochemicals, Pig Iron, Refineries & Marketing, Speciality Chemicals, Sponge Iron, and Sugar. Launched on September 7, 2011, the index has breached levels of 5,000 at approximately 7x P/E multiples. It is reconstituted semi-annually and caps individual stocks at 10% weightage. NSE Indices Limited, previously known as India Index Services & Products Limited, manages the index through a three-tier structure.
How is NIFTY Commodities Calculated?
This formula is used to compute the index value:
Index Value = Current Index Market Capitalisation/ (Base Free Float Market Capitalisation * Base Index Value)- H3
Market Capitalisation of the Current Index = Shares o/s * IWF * Capping factor * Price
Because it is based on the market capitalisation technique, IWF (Investible Weight Factors) = 1.
The NIFTY Commodity index is rebalanced semi-annually on January 31 and July 31 using data from the previous six months. Nifty commodities companies replacements take effect in March and September.
How are Stocks Selected for NIFTY Commodities?
In order to determine the Nifty Commodities share price, its thirty Nifty Commodities stocks list is weighted based on a real-time base market capitalisation value and a periodically limited free-float market capitalisation.
Securities Eligibility Criteria:
- On the National Stock Exchange, it must be listed.
- Must be part of NIFTY 500.
- Minimum of 10 stocks.
- If the number falls below 10, deficit stocks are selected from the top 800 ranked stocks.
- Must be part of the commodities sector.
- New securities included if float-adjusted market capitalisation is at least 1.5 times the index’s smallest constituent’s free-float market capitalisation.
- 90% or more of the trades throughout the previous six months.
- Listing history of at least six months.
- A recently listed company can be included if it meets eligibility criteria for three months.
- Adherence to a 10% cap for single stock at rebalancing time.
