NIFTY INFRA

In this index, it is well recognized that quality infrastructure is one of the most prominent necessities for unleashing high and sustained growth. Also, the government outlays for infrastructure have increased significantly in years. As, infrastructure has become a focus area and in several years, and not only have the outlays for budgetary expenses towards the infrastructure sector been significantly increasing, but also private investment is also encouraged. Prior, the emphasis was on bringing in more and more projects, and currently, it also includes encouraging the financial products that are best suited for infrastructure. For meeting the financial needs of this specific public-private partnership, it is essential to promote standards and also raise capital most efficiently as well as cost-effectively while ensuring long-term sustainability. Also, by considering the market needs, NSE Indices has developed the Nifty Infrastructure Index for capturing the performance and working of the companies in the infrastructure sector. It also includes companies belonging to Power, Port, Air, Telecom, Roads, shipping, Railways, and other Utility Services providers. It mainly comprises a maximum of 25 companies listed on the National Stock Exchange of India (or NSE). It is specifically computed using the free-float market capitalization method, and in which the level of the index reflects the total free-float market value of entire stocks in the index relative to a particular base market capitalization value. It can also be used for a variety of purposes such as the launching of index funds, benchmarking fund portfolios, and ETFs and structured products. Also, the Eligibility Criteria for the Selection of Constituent Stocks:

• The companies even must rank within the top 800 by the average full market capitalization as well as average daily turnover for the last 6 months.
• Also, companies should form a part of the infrastructure sector.
• The companies that are allowed to trade in the F&O segment are only eligible to be components of the index.
• Its trading frequency should be at least 90% in the last 6 months.
• It should also have a listing history of 6 months as a company that comes out with an IPO would be eligible for the inclusion in the index, only when it fulfills the normal eligibility criteria for the index for 3 months instead of 6 months.
• The final selection of companies should be made based on the free-float market capitalization of the companies.
• Also, the weightage of each stock in the index is be calculated based on its free-float market capitalization such that no single stock could be more than 34% and the weightage of the top 3 stocks also cumulatively should not be more than 63% during rebalancing.

Index Re-Balancing: It is done based on a semi-annual basis, and the cut-off date is January 31 as well as July 31 of each year, i.e., and for a semi-annual review of indices, average data for 6 months ending the cut-off date is considered. Also, 4 weeks before the notice is given to the market from the date of the change. Index Governance: Also, a professional team manages all NSE indices, and there is a three-tier governance structure, which comprises the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity) and the Index Maintenance Sub-Committee.