What is Nifty Auto
The NIFTY Auto Index is designed to reflect the behaviour and performance of the Automobiles segment of the financial market. The NIFTY Auto Index comprises 15 tradable, exchange listed companies. The index represents auto related sectors like Automobiles 4 wheelers, Automobiles 2 & 3 wheelers, Auto Ancillaries and Tyres. NIFTY Auto Index is computed using free float market capitalization method, wherein the level of the index reflects the total free float market value of all the stocks in the index relative to particular base market capitalization value. NIFTY Auto Index can be used for a variety of purposes such as benchmarking fund portfolios, launching of index funds, ETFs and structured products.
Nifty Auto Companies List and its Weightage (1st July 2023)
Mahindra & Mahindra Ltd.
Maruti Suzuki India Ltd.
Tata Motors Ltd.
Bajaj Auto Ltd.
Eicher Motors Ltd.
Hero MotoCorp Ltd.
Tube Investments of India Ltd.
TVS Motor Company Ltd.
Ashok Leyland Ltd.
Bharat Forge Ltd.
Samvardhana Motherson International
Sona BLW Precision Forgings Ltd.
Balkrishna Industries Ltd.
How Nifty Auto Stocks are Selected
Eligibility Criteria for Selection of Constituent Stocks
i. Companies should form part of NIFTY 500 at the time of review. In case, the number of eligible stocks representing a particular sector within NIFTY 500 falls below 10, then deficit number of stocks shall be selected from the universe of stocks ranked within top 800 based on both average daily turnover and average daily full market capitalisation based on previous six months period data used for index rebalancing of NIFTY 500.
ii. Companies should form a part of the Automobiles sector.
iii. The company's trading frequency should be at least 90% in the last six months.
iv. The company should have a listing history of 6 months. A company which comes out with an IPO will be eligible for inclusion in the index, if it fulfills the normal eligibility criteria for the index for a 3 month period instead of a 6 month period.
v. Final selection of 15 companies shall be done based on the free-float market capitalization of the companies.
vi. Weightage of each stock in the index is calculated based on its free-float market capitalization such that no single stock shall be more than 33% and weightage of top 3 stocks cumulatively shall not be more than 62% at the time of rebalancing.
Index is re-balanced on semi-annual basis. The cut-off date is January 31 and July 31 of each year, i.e. For semi-annual review of indices, average data for six months ending the cut-off date is considered. Four weeks prior notice is given to market from the date of change.
A professional team manages all NSE indices. There is a three-tier governance structure comprising the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity) and the Index Maintenance Sub-Committee.