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EV gets its own Index

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Good news to all eco-friendly investors because now, you can track the performance of your favourite Electric Vehicle (EV) manufacturers stocks on the newly launched NIFTY EV & New Age Automotive Index. NSE indices ltd. a subsidiary of the National Stock Exchange (NSE) announced the launch of the NIFTY EV & New Age Automotive Index on thursday. Let’s buckle our belts and drive deeper into what this index is all about

Purpose of the Index

The NIFTY EV index is the first ever index dedicated specifically to the booming Electric Vehicles (EV) sector. This index helps investors track the performances of EV manufacturers which includes all aspects of the EV ecosystem such as electric vehicles, EV technology, EV Research and Development (R&D), EV parts and component manufacturers and so on…

The index provides an opportunity for investors to invest in sector specific stocks, in this case, the EV industry, thus facilitating the creation of new investment products in the sector. The NSE is also promoting the Make-In-India initiative by the government which, under its umbrella, extends to the EV sector too. The EV index aligns with goals of the government which is to promote the growth and expansion of domestic manufacturing of EV and its components and technologies.

“The Nifty EV & New Age Automotive index aims to track the performance of companies which form a part of the EV ecosystem or are involved in the development of new age automotive vehicles or related technology"

-NSE in an official release.

The NIFTY EV Index adds to the list of 17 other thematic indices hosted by the National Stock Exchange which includes- Nifty Energy Index, Nifty Housing Index, Nifty Commodities Index, Nifty India Defence, Nifty India Digital and so on…

Index Fundamentals

Here’s all you need to know about the new index-

  1. Eligibility-
  • The base date for companies under this index is 2nd April, 2018.
  • Only companies listed on the NIFTY 500 index at the time of review are eligible to be included in this index.
  • Eligible stocks must be involved in the production or supply of electric/new age vehicles, batteries, components, raw materials, or technology.
  1. Weightage-
  • The stocks shall be categorised into the following groups- 
  • Group A:
    • contains stocks of companies manufacturing electric and innovative vehicles (2-wheelers, 3-wheelers, 4-wheelers, passenger vehicles, commercial vehicles).
    • Their weightage shall not exceed 40% of the total weight of the Index.
    • Each individual stock shall hold a maximum of 8% weightage and not more than that.
  • Group B:
    • Contains stocks of companies that manufacture batteries  for Electric and New age automotive vehicles.
    • These include Lithium-ion batteries, lithium-ion battery packs, lead-acid batteries, sodium-ion batteries, solid-state batteries, electric vehicle battery cells, e-ride batteries, e-rickshaw batteries.
    • Each individual stock shall be capped at a weightage of 4%.
  • Group C:
    • C(1)> Companies which manufacture components for Electric and New age automotive vehicles/batteries.
    • C(2)> Companies which Manufacture/Supply raw material for Electric and New age automotive vehicles/batteries.
    • C(3)> Companies which provide/develop Advanced Automotive Technology for Electric and New age automotive vehicles/batteries.
    • Each individual stock shall be capped at a weightage of 4%.
  • Group D:
    • All companies that are part of eligible universe for group C and are part of any one of the below groups-
    • Product Linked Incentives (PLI) for Advanced Automotive or ACC batteries.
    • Faster Adoption and manufacturing of Electric Vehicles (FAME). 
    • Society of Manufacturers of Electric Vehicles (SMEV).
    • Each individual stock shall be capped at a weightage of 4%.
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         Source: NSE

  1. Review and Adjustment-
  • The index is reviewed and updated every six months (semi-annually).
  • The weights of the stocks are adjusted every three months (quarterly) to keep within the specified limits.
  1. Companies & Weightage
  • The companies currently in the NIFTY EV & New Age Automotive Index and their respective weightage is as follows
Company NameWeight
Bajaj Auto Ltd.7.08%
Tata Motors Ltd.6.49%
Mahindra & Mahindra Ltd.5.83%
Maruti Suzuki India Ltd.5.28%
Exide Industries Ltd.4.78%
Bosch Ltd.4.56%
Samvardhana Motherson International Ltd.4.45%
Eicher Motors Ltd.4.42%
CG Power and Industrial Solutions Ltd.4.30%
Himadri Speciality Chemical Ltd.4.28%
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In conclusion…

The Nifty EV & New Age Automotive Index captures the growth and innovation within India's electric vehicle (EV) sector. By including companies from the Nifty 500 involved in EV manufacturing, batteries, and related technologies, it provides a focused view of this dynamic industry. The index's structured weight limits and regular updates ensure balanced and relevant representation. As the automotive industry evolves towards sustainable solutions, this index offers investors a strategic way to engage with the sector's future.

Happy Investing!!!

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