The National Stock Exchange (NSE) on July 25, 2024, issued a notification regarding the launch of the Nifty Rural Index.
The following has been stated: -
•The Nifty Rural index strategically tracks the performance of stocks from the Nifty 500 Index that derive their revenues from rural markets and hence capture the Indian rural theme.
•The index includes stocks from the relevant basic industries of the sectors such as Consumer Goods, Automobile and Auto Components, Power, Telecommunication, and Financial Services, etc.
•The largest 75 stocks from eligible basic industries are chosen based on their 6-month average free-float market capitalization as on the cut-off dates at the end of January and July.
•The weight of the stocks in the index is based on their free-float market capitalization with the weight of each sector capped at 25% and the weight of each stock in the index capped at 10%. The base date for the index is April 01, 2005, and the base value is 1000. The index will be reconstituted semi-annually and rebalanced on a quarterly basis
•The new index is expected to act as a benchmark for asset managers and be a reference index tracked by passive funds in the form of Exchange Traded Funds (ETFs), index funds, and structured products.
