NSE's index services subsidiary, NSE Indices launched a new thematic index – Nifty India Railways PSU.
The Nifty India Railways PSU index tracks the performance of PSUs from the Nifty 500 which are either owned by the Ministry of Railways (classified as core group) or cater to the Indian Railways (classified as non-core group). The weight of each stock in the index is based on its free-float market capitalization. The aggregate weight of stocks belonging to the core group is capped at 80% and the aggregate weight of stocks belonging to the non-core group is capped at 20%. The weight of each stock is capped at 20%
The base date for the index is 1 April 2021, and the base value is 1000. Since inception, the index has delivered a total return of 49.12% CAGR. In the last year alone, it has risen by 54.68%. The index will be reconstituted semi-annually and rebalanced on a quarterly basis.
Currently, Indian Railway Finance Corporation holds the largest weight in the index at 18.86%, followed by Rail Vikas Nigam (17.49%), Indian Railway Catering and Tourism Corporation (17.40%), Container Corporation of India (16.13%), and NTPC (7.26%).
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.