Launch of Nifty EV Index marks the arrival of the EV era

With Nifty EV & New Age Automotive Index, investors can have exposure to the entire electric vehicle sector in one place

Photo for representation: iStock

The National Stock Exchange of India (NSE) recently launched India’s first electric vehicle (EV) index, named the Nifty EV & New Age Automotive Index. This index will track the performance of companies involved in manufacturing EVs, batteries, charging infrastructure and other critical components of the electric vehicle ecosystem, an NSE statement said.

A stock index is a group of shares from a single exchange that are used as benchmarks to evaluate an investment’s performance against others. It typically measures the price performance of the basket of company stocks using a standardised methodology. Some of the important indexes in India are the BSE Index, which puts together 30 well-established and financially sound companies listed on the Bombay Stock Exchange, and Nifty 50, which represents the weighted average of 50 of the largest Indian companies listed on NSE.

The Nifty EV Index will offer an opportunity to investors to capitalise on the growing electric vehicle market. It will facilitate creation of financial products that will help fund managers to invest in the EV and new age automotive market, thereby providing an investment vehicle to investors. With this index, investors can have exposure to the entire electric vehicle sector in one place. As EV demand is expected to grow, the stocks of companies included in this index are also expected to perform well.  

The base date for the Nifty EV index is April 02, 2018, and the base value is 1,000. The index will be reorganised twice a year and rebalanced every quarter to align with market trends. The index will have 33 companies, including Bajaj Auto, Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Exide Industries, Bosch, Samvardhana Motherson International, Eicher Motors, CG Power and Industrial Solutions and Himadri Speciality Chemical.

The EV sector in India has been on a high, thanks to support from government subsidies for adoption and supply side incentives to promote India as a manufacturing destination for EVs. The vision behind the EV policies is to promote domestic manufacturing of EVs in the country and attract investments by reputed global EV manufacturers, thereby giving an impetus to the Make in India initiative.

Electric vehicle sales data for FY2024 point at positive trends which will have an impact on regional demand patterns and the supply-chain. EV sales rose 10.78 per cent from FY21 to FY24. In FY24, the number of units sold increased to 1,677,515, from 1,183,343, with year-on-year growth of 41.76 per cent.

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