The Nifty Auto is a sectoral index created by NSE Indices Limited, a subsidiary of the National Stock Exchange (NSE). The index is designed to measure the performance of the automobiles and auto ancillary stocks listed on the NSE.
The Nifty Auto index comprises companies engaged in the manufacturing of automobiles, including passenger cars, commercial vehicles, two-wheelers, and three-wheelers. It also includes auto-ancillary companies that manufacture components and provide services related to the automotive industry.
The Nifty Auto index is reviewed and rebalanced semi-annually to ensure that it accurately reflects the performance of the Indian automotive industry. During the semi-annual review, companies that meet the eligibility criteria are included in the index, and companies that do not meet the criteria are removed.
Investors, fund managers, and market analysts widely use the Nifty Auto index as a benchmark to gauge the performance of their investments in the automotive sector. Nifty Auto consists of 16 of the largest companies in the Indian automotive sector. The top 10 constituents in the Nifty Auto stock list and their respective weights are tabulated below.
Ranking
Constituent
Weight
1
Mahindra & Mahindra Limited
21.79%
2
Maruti Suzuki India Limited
14.87%
3
Tata Motors Limited
14.76%
4
Bajaj Auto Limited
9.35%
5
Hero MotoCorp Limited
6.04%
6
Eicher Motors Limited
5.89%
7
TVS Motor Company Limited
4.61%
8
Bharat Forge Limited
3.62%
9
Samvardhana Motherson International Limited
3.26%
10
Ashok Leyland Limited
2.93%
Inclusion Criteria for Stocks in the Nifty Auto index
For a company to be included in the Nifty Auto stock list, it needs to satisfy the following eligibility criteria:
The company must be part of the Nifty 500 index.
If the number of stocks eligible to represent the Nifty Auto index is below 10, the deficit stocks shall be selected from the top 800 companies in terms of the average daily turnover and average daily full market capitalisation for the last six months.
The company must be a part of the automobile sector.
The company must have had a trading frequency of at least 90% in the last six months.
The company must have a listing history of at least 1 month as of the specified cut-off date.
The final set of 15 companies set to represent the Nifty Auto index will be selected from the list of eligible stocks on the basis of free-float market capitalisation.
The weightage of a single stock in Nifty Auto shall not exceed 33%, and the weightage of the top three stocks shall not be more than 62%.
How is the Nifty Auto Index Calculated?
The Nifty Auto index is calculated using the free-float market capitalisation method. Here is the process through which the index value is computed.
Step 1: Computation of free-float market capitalisation of stocks
The market capitalisation of each stock in the Nifty Auto index is calculated and adjusted for free-float using a free-float factor. Here is the mathematical formula that is used.
Free-Float Market Cap = [(Current Market Price x Number of Outstanding Shares) x Free-Float Factor]
Step 2: Computation of Nifty Auto index value
Once the free-float market cap of each stock in the index is computed, it is then used to arrive at the index value. The mathematical formula that is used to calculate the index value is as follows:
Nifty Auto = [(Free-Float Market Cap of All Constituents x Base Index Value) ÷ Base Market Cap]
Here, the base index value is 1,000, whereas the base market cap is the market capitalisation of all of the index’s stocks as of the base date of January 1, 2004.
Nifty Auto FAQ's
If you wish to gain exposure to some of the leading stocks in the Indian automobile sector, you could consider investing in a mutual fund based on the Nifty Auto index. However, as with any market-linked investment option, Nifty Auto index funds are prone to market risks, volatility, and sector-specific risks.
The primary objective of Nifty Auto is to accurately reflect the performance of the Indian automobile sector and the various industries contained within it.
No. Since the Nifty Auto is a sectoral index meant for reference, and not a stock, you cannot directly purchase it. Instead, you can purchase units of a mutual fund that is based on the index.
The top five stocks in the Nifty Auto index in terms of weightage include Mahindra & Mahindra Limited, Maruti Suzuki India Limited, Tata Motors Limited, Bajaj Auto Limited, and Hero MotoCorp Limited.
Other Indices
Indices Name
Price
Price Change(% change)
Nifty Alpha 50
51242.2
0.2206
Nifty 100 Liq 15
7338.85
0.4256
Nifty 10 B-G Sec
2617.35
0.0596
Nifty 8-13 G-Sec
2982.7
0.0745
Nifty10 BG-Sec-C
874.79
0.0412
Nifty GS 4 8Yr
3261.52
0.0494
Nifty GS 11 15Yr
3262.9
0.1732
Nifty GS 15YrPlu
3473.48
0.0035
Nifty100 ESG
5008.8
0.8344
Nifty200 Qual 30
20492.35
0.7597
Nifty Alpha LV30
26102.05
0.6299
Nifty200 Momen30
30995.15
0.4106
BSE SENSEX 50
25706.72
0.8809
BSE Sensex Nxt50
85304.01
0.6839
BSE 100 ESG Indx
413.53
0.8536
BSE Low Volat.
1779.37
0.8290
BSE Momentum
2184.47
0.1518
BSE Quality
1905.13
0.9704
BSE SENSEX Nxt30
41087.27
0.5465
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