Nifty Realty

Nifty Realty

The Nifty Realty Index is specifically created to showcase the performance of the real estate sector within the broader Indian equity market. This index is part of the Nifty family of indices, which are overseen by NSE Indices Limited, a subsidiary of the National Stock Exchange (NSE) of India. The nifty realty share price serves as a benchmark for investors to monitor the performance of major real estate companies listed on the NSE.

The index is regularly updated, usually every six months, to reflect changes in its makeup using the most recent market information and financial indicators, guaranteeing its continuous suitability and precision in depicting the real estate industry. Therefore, the establishment and upkeep of Nifty Realty are crucial in improving market clarity, enabling improved choices for investments, and fostering a more comprehensive grasp of the real estate market trends in India.

Features of Nifty Realty

Following are the features of Nifty Realty 

• Real Estate Sector Index: Nifty Realty stocks are dedicated solely to the real estate industry, tracking the success of firms involved in property creation, operation, and various other activities related to real estate.
• Index Components: This index includes a collection of real estate firms that are considered the most liquid and financially important in the Indian market. These firms are chosen based on different factors such as market value and ease of trading.
• Representation: It symbolizes the functioning of the real estate market, enabling investors to assess the well-being and movements of this particular sector.
• Nifty Realty Weightage: Similar to various Nifty indices, Nifty Realty is market capitalisation-weighted, indicating that firms with bigger market capitalisations exert a more significant impact on the index's results.

How to Calculate Nifty Realty?

Here’s how to calculate the Nifty Realty index:

• Nifty Realty Index is calculated using the free float market capitalisation method. 
• The market capitalisation of each individual stock is determined by multiplying the number of freely tradable shares by the current market price of the stock.
• Every share is given an importance score depending on its market value as a free float compared to the combined market value of all the free float shares in the index.
• The index value is calculated using the formula: 

The index value is calculated using the formula:

Nifty Realty Index Value= ∑(Free-Float Market Capitalisation of each constituent×Weighting Factor) / Base Market Capitalisation x Base Index Value

Eligibility Criteria for Choosing Stock Holdings

Following are the eligibility criteria for choosing the stock holdings: 

1. Firms must be included in the Nifty 500 list during the evaluation period. 
2. Businesses should  be included in the Real Estate Sector.
3. The business's trading activity must exceed 90% over the past half-year.
4. The business must maintain a listing history of at least one month as of the specified date.
5. The ultimate selection of 10 businesses will be determined by the market capitalisation of the companies' free-float shares.
6. The nifty realty weightage  in the index is determined by its free-float market capitalization, ensuring that no one stock can hold more than 33% of the total value. Additionally, the combined value of the top three stocks cannot exceed 62% when the index is rebalanced.