NSE Indices, a subsidiary of the National Stock Exchange of India (NSE), launched a new index to track the performance of recently listed companies. The Nifty IPO Index will specifically monitor the last 100 Initial Public Offerings (IPOs) on the NSE's main board.
The weight of each company in the index will be based on its free-float market capitalization, with a cap of 10% to prevent any single stock from dominating the index. The index will be reviewed and rebalanced on a quarterly basis to reflect changes in the market.
This new index is expected to serve as a valuable tool for investors and financial institutions. Asset managers can use it as a benchmark to compare the performance of their IPO-focused investments. Additionally, the Nifty IPO Index could serve as a reference point for passive investment products like Exchange Traded Funds (ETFs), index funds, and structured products.
The Nifty IPO Index has a base date of 2 January 2017, with a starting value of 1000. Since its inception, the index has delivered a Compound Annual Growth Rate (CAGR) of 11.29%. It has shown decent performance in recent years, with a CAGR of 14.27% over the past five years and an impressive 41.36% in the last year.
The top three companies within the Nifty IPO Index by weightage are Mankind Pharma (at 9.05%), Indian Renewable Energy Development Agency (at 5.90%), and Global Health (at 5.02%).