Nifty EV Index: Tata Motors Outweighs Maruti Suzuki, Bajaj Auto Tops

Tata Motors Ltd. enjoys a higher weightage than Maruti Suzuki India Ltd. in the newly launched Nifty EV index, underscoring the lack of an electric vehicle in the stable of India’s largest carmaker.

Bajaj Auto Ltd. tops the index where its larger rival Hero MotoCorp Ltd. isn’t among the Top 10 constituents by weightage, according to a factsheet on the website of NSE Indices Ltd.—a unit of the National Stock Exchange of India Ltd.

What’s also noteworthy is that at least four Tata Group companies—Tata Motors, Tata Technologies Ltd., Tata Elxsi Ltd. and Tata Chemicals Ltd.—are part of this new index.

The Nifty EV and New Age Automotive Index aims to track the performance of companies that form a part of the EV ecosystem or are involved in the development of new-age automotive vehicles or related technology, NSE Indices said in an exchange filing announcing the formation of the index.

At present, 33 stocks are part of the Nifty EV index, which will be reconstituted semi-annually and rebalanced on a quarterly basis. It has a base date of April 2, 2018, and a base value of 1,000. Only stocks within the Nifty 500 are eligible to be part of the index, provided they fulfil any of the following criteria:

• Group A: Manufacturers of electric and new-age automotive vehicles.

• Group B: Manufacturers of batteries for electric and new-age automotive vehicles.

• Group C: Manufacturers of EV components, suppliers of raw materials to EV component firms, and EV technology firms.

• Group D: Group C firms that are part of the EV Battery PLI Scheme, the FAME subsidy scheme, and the Society of Manufacturers of Electric Vehicles. 

To be sure, the weightage of the constituents is dynamic.

The weight of each stock in the index is based on its free-float market capitalisation. The aggregate weight of the stocks belonging to Group A is capped at 40%. The weight of each stock in Group A is capped at 8%. All other stocks are capped at 4%.

The weight of the stocks will be rebalanced on a quarterly basis.

“The Nifty EV and New Age Automotive—India’s first-ever electric vehicle index—aligns with NSE’s vision to provide innovative indices in line with market trends,” Mukesh Agarwal, chief executive at NSE Indices, said in a statement. “The launch will facilitate the creation of products, which will create opportunities for asset managers to invest in the electric vehicle and new-age automotive markets, thereby providing an investment vehicle to investors.”