NSE launches Nifty Cement Index; here's everything investors need to know

The Nifty Cement Index comprises stocks that are part of the Nifty Total Market Index and are classified under the 'Cement & Cement Products' basic industry

NSE Cement Index:  The National Stock Exchange of India (NSE) has launched a new sectoral gauge — the Nifty Cement Index — to track the performance of companies in the Cement & Cement Products space within the Nifty Total Market universe.

Index structure, eligibility

According to NSE data, the Nifty Cement Index will comprise stocks that are part of the Nifty Total Market Index and are classified under the ‘Cement & Cement Products’ basic industry. The exchange said the list of eligible basic industries may be reviewed from time to time.

 

The index has April 1, 2005, as its base date, with a base value of 1,000.

 

Up to 20 stocks will be selected from the Nifty Total Market universe based on their six-month average free-float market capitalisation. Stocks available for trading in the derivatives (F&O) segment on the NSE will be given preference. Non-F&O stocks, NSE said, may be considered, if required, to complete the selection.

 

However, a non-member stock that is not available for trading in the F&O segment will not be eligible for inclusion if it has hit the upper or lower circuit limit in 20 per cent or more of the total trading days in the six months preceding the cut-off date, according to NSE.   CHECK Stock Market LIVE Updates

Weightage, rebalancing

According to the NSE, the weights of individual stocks will be based on free-float market capitalisation, with a cap of around 15 per cent per stock.

 

The index, NSE daid, will be reconstituted on a semi-annual basis and rebalanced quarterly.

Constituents, weight distribution

The index comprises major cement companies including Grasim Industries, UltraTech Cement, Ambuja Cements, Shree Cement, JK Cement, Dalmia Bharat, The Ramco Cements, ACC, JK Lakshmi Cement, Nuvoco Vistas Corporation, Birla Corporation, Star Cement, JSW Cement, India Cements, Prism Johnson and Orient Cement.

 

Among these, Grasim Industries has the highest weight at 15.37 per cent, followed by UltraTech Cement at 15.26 per cent. Ambuja Cements accounts for 14.92 per cent, while Shree Cement has a weight of 14.4 per cent. Together, the top four stocks account for nearly 60 per cent of the index weight, indicating a high concentration at the top. 

(Source: NSE)

 

JK Cement carries a weight of 11.06 per cent, Dalmia Bharat 7.93 per cent, and The Ramco Cements 6.78 per cent. The balance weight is distributed among ACC, JK Lakshmi Cement, Nuvoco Vistas Corporation and other constituents.

Applications

The NSE said the Nifty Cement Index can be used as a benchmark for fund portfolios and for launching index funds, exchange-traded funds (ETFs) and structured products.