Nifty Consumer Durables Index
The National Stock Exchange (NSE)'s NIFTY Consumer Durables sectoral index measures the performance of the country's consumer durables market. It consists of fifteen exchange-listed, marketable durables equities whose prices are monitored in real time.
The basic industries that sell air conditioners, consumer electronics, bicycles, footwear, furniture, home furnishings, flooring, gemstones, jewelry, and watches, glass, household appliances, leather and leather products, leisure products, plywood boards/laminates, sanitary ware, and toys are eligible to be included in the index NIFTY Consumer Durables index.
The Nifty Consumer Durables Total Returns Index is a variation of the NIFTY Consumer Durables index. Index funds, exchange-traded funds (ETFs), structured products, and fund portfolio benchmarking are all well suited for this index.
History of Nifty Consumer Durables
Launched on January 15, 2020, the NIFTY Consumer Durables index has a base date of April 1, 2005, and a base value of 1000. Since its launch, the NIFTY Consumer Durable share price has surpassed 25,000 at roughly 56x P/E multiples. It caps the weightage of individual equities at 33% and is rebuilt semi-annually.
NSE Indices Limited, formerly India Index Services & Proucts Limited, is the owner and manager of the NIFTY Consumer Durables index. The Index Advisory Committee, the Index Maintenance Sub-Committee, and the Board of Directors of NSE Indices make up the three-tier structure that oversees the Consumer Durables index.
Criteria to Choose Stocks for NIFTY Consumer Durables Index
The 15 stocks in the NIFTY Consumer Durables are weighted based on a real-time base market capitalisation value and a periodically capped free-float market capitalization. This process determines the share price of the index.
For inclusion in the NIfty Consumer Durables Index, the securities must meet the following eligibility requirements:
- The stock should belong to the National Stock Exchange's listing.
- The stock should be included in the NIFTY 500.
- The deficiency number of stocks will be chosen from the universe of the top 800 ranked stocks if the number of eligible stocks is less than 10, and will be determined by taking into account both the average daily turnover and the average daily complete market capitalisation data of the preceding six months from the NIFTY 500 universe.
- The stock belongs in the consumer durables industry.
- The stock must have traded at least 90% of the time throughout the previous six months.
- The stock should have a minimum of six months' worth of listing history.
- If a company passes the eligibility requirements above for a period of three months instead of six months, it can be classified as an IPO.
- Should follow the 33% cap for a single stock and the 62% cap for the top 3 stocks combined at rebalancing time.
How to Calculate NIFTY Consumer Durables?
This formula used to compute the index value is given below:
Market capitalisation as of today / (Base market capitalisation * Base Index Value) equals the index value.
The NIFTY Consumer Durables index is calculated semi-annually using data spanning six months, with January 31 and July 31 of each year serving as the cutoff dates. After providing the market with four weeks' notice, the last trading day of March and September is when any stocks in NIFTY Consumer Durables are replaced.
