Nifty India Manufacturing

Nifty India Manufacturing Index

A thematic index on the National Stock Exchange (NSE), NIFTY India Manufacturing measures the performance of the country's manufacturing industry in real-time. It currently consists of 79 stocks chosen from the combined universe of the NIFTY 100, NIFTY Midcap 150, and NIFTY Smallcap 50 indexes based on float-adjusted market capitalization. 

According to the AMFI classification, a few basic industries that can be included in the NIFTY Manufacturing index are 2/3 Wheelers; Abrasives; Aerospace & Defense; Air Conditioner; Aluminum, Copper & Zinc Products; Batteries; Compressors & Pumps; Biotechnology; Cables; Commercial Vehicles; Electrodes; Explosives; Fertilizers; Footwear; Furniture; Industrial Equipment's; Industrial Gases; Iron & Steel; Lubricants; Medical Equipment & Supplies; Petrochemicals; Pharmaceuticals; Precious Metals; Railway Wagons; Refractories; Ship Building; Tyres & Rubber Products, etc.

History of Nifty India Manufacturing

The Nifty India Manufacturing Index was introduced by NSE Indices Limited on August 16, 2021, with a base date of April 1, 2005, and a base value of 1000, in recognition of the strategic significance of the Indian manufacturing industry. 

Since its launch, the share price of NIFTY India MFG has surpassed 7,500 at about 15x P/E multiples. It caps the weightage of individual equities at 5% and is reconstituted semi-annually. The NIFTY India Manufacturing Total Returns Index is a variation of NIFTY

Management of the Nifty India Manufacturing Index 

The BOD of NSE Indices, the Index Advisory Committee, and the Index Maintenance Sub-Committee make up the three-tier structure that oversees the India Manufacturing index. 

How are Stocks Selected for Inclusion in NIFTY India Manufacturing?

To be considered for addition to the NIFTY India Manufacturing index fund, the securities must fulfill the following eligibility criteria: 

• Belongs on the National Stock Exchange's listing.
• Should be included in the combined universe of the NIFTY 100, Nifty Midcap 150, and Nifty Smallcap 50.
• The index's minimum number of stocks varies.
• According to the AMFI categorization, it belongs to the manufacturing sector.
• In each qualifying fundamental industry, should cover about 75% of the float-adjusted market capitalization of eligible equities.
• Should follow the 5% cap when dealing with a single stock that has a free-float market capitalization.
• Should maintain a minimum weight of 20% for the sectors of capital goods and automobiles and auto components, unless the number of stocks from these sectors is fewer than 4.
• ought to take into account solely common stock shares. 

How is NIFTY India Manufacturing Calculated?

To determine the share price of NIFTY India Manufacturing, its 79 stocks are weighted based on six months of regularly capped free-float market capitalization data, which is then compared to a base market capitalization value in real time. 

The index value is calculated as follows –  

Index Value = Current Index Market capitalization/ (Base Free Float Market capitalization * Base Index Value)

Every year on January 31 and July 31, the NIFTY India Manufacturing index chart is rebalanced semi-annually using data from six months. Effective from the final trading day of March and September, NIFTY Manufacturing's stocks, if any, will be replaced. Every quarter, this index will be checked to see if it complies with SEBI's guidelines for portfolio concentration for exchange-traded funds, or index funds.