Nifty Infra Index
NIFTY Infra NSE is a real-time thematic index on the National Stock Exchange (NSE) that tracks the performance of the infra sector in the Indian economy. It comprises 30 stocks from various industries, including Power, Telecom, Roads, Railways, Shipping, Air, and other utility service providers. The index was launched on August 7, 2007, with a base value of 1000.
Since its inception, the NIFTY Infrastructure share price has breached levels of 4,000 at approximately 14x P/E multiples. The index is reconstituted semi-annually and caps individual stocks at 20%. NSE Indices Limited, previously known as India Index Services & Products Limited, owns and manages the index. The index is governed by a three-tier structure, including the Board of Directors, Index Advisory Committee (Equity), and Index Maintenance Sub-Committee. The NIFTY Infrastructure Total Returns Index is a variant that is ideal for benchmarking fund portfolios and launching other structured investment products, index funds, and ETFs. Additionally, Infra BEES, an Exchange Traded Fund (ETF) that tracks the NIFTY Infrastructure Index, offers investors an opportunity to participate in the infrastructure sector's performance through a single security.
How is NIFTY Infrastructure 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
In this case, 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.
Every year on January 31 and July 31, the NIFTY Infrastructure Index is rebalanced semi-annually using data spanning six months. The last trading day of March and September is when any stocks in NIFTY Infra are replaced, if any.
How are NIFTY Infra Stocks Selected
The NIFTY Infrastructure Index comprises thirty companies with real-time base market capitalisation values and limited free-float market capitalisation, including eleven sectors: Oil, Gas, Construction, Telecom, Power, Services, Healthcare, Real Estate, Automobiles, and Consumer Services.
Securities Eligibility Criteria:
- National Stock Exchange listing is a requirement.
- Must be part of NIFTY 500.
- If eligible stocks are below 10, deficit stocks are selected from top 800 ranked stocks.
- Must be part of the infrastructure sector.
- Must be tradeable in the F&O segment of NSE.
- Must have a trading frequency of at least 90% in the past six months.
- Must have a minimum of six months' worth of listing history.
- A recently listed company can be included if it meets eligibility criteria for three months.
- Must adhere to a 20% weightage cap at rebalancing.
- New securities can be included if their float-adjusted market capitalisation is at least 1.5 times of the index’s smallest constituent’s free-float market capitalisation.
