India’s first Electric Vehicle index launched by National Stock Exchange

The National Stock Exchange’s index services subsidiary, NSE Indices Ltd, has launched the Nifty EV & New Age Automotive index, marking India’s first stock exchange index to track the performance of companies within the electric vehicle (EV) ecosystem. This thematic index aims to provide a comprehensive overview of the electric and new-age automotive sectors.

Focus and Scope of the Index

Designed to monitor companies involved in the electric vehicle ecosystem, the Nifty EV & New Age Automotive index includes firms developing electric vehicles and new-age automotive technologies such as hybrid and hydrogen fuel vehicles. This ensures the index captures the breadth of advancements in the EV market.

Eligibility Criteria and Composition

Companies eligible for inclusion in the index must be part of the broader Nifty 500 index and engaged in producing or supplying electric or new-age automotive vehicles, batteries, components, raw materials, and technology. Presently, the index comprises 33 stocks, reflecting a diverse representation of the sector.

Top Constituents by Weightage

The leading companies by weightage in the index include,

Bajaj Auto

Tata Motors Ltd

Maruti Suzuki India Ltd

Mahindra & Mahindra Ltd

Exide Industries Ltd

Bosch Ltd

Samvardhana Motherson International Ltd

Eicher Motors Ltd

CG Power and Industrial Solutions Ltd and

Himadri Speciality Chemical Ltd.

These companies play pivotal roles in the EV ecosystem, underscoring the index’s comprehensive nature.

Benchmark and Investment Reference

This new index is expected to act as a benchmark for asset managers and a reference index for passive funds such as Exchange Traded Funds (ETFs), index funds, and structured products. The base date for the index is April 2, 2018, with a base value of 1000. Reconstitution will occur semi-annually, and rebalancing will be quarterly to maintain accuracy and relevance.

Investment Opportunities Created

NSE Indices CEO Mukesh Agarwal highlighted that the index’s launch creates investment opportunities for asset managers in the electric vehicle and new-age automotive markets. This initiative aims to provide investors with a dedicated vehicle to invest in the rapidly growing EV sector, aligning with broader market trends.

Government Initiatives and Market Growth

This index launch aligns with the Indian government’s efforts to promote vehicles powered by batteries and alternate fuels. Electric vehicle adoption is notably increasing in the two and three-wheeler segments. During 2023-24, approximately 1.6 million electric vehicles were sold in India, including 944,126 two-wheelers, 632,485 three-wheelers, 90,432 four-wheelers, and 3,693 buses, according to the Vahan portal.

Reaction by Industry Player

The recent launch of India’s Electric Vehicle (EV) index by NSE Indices marks a significant milestone for the EV industry, reinforcing investor confidence and celebrating the sector’s progress. The EV index serves as a beacon for investors, providing transparency and benchmarks that guide sustainable investments. By tracking the performance of EV-related stocks, it underscores the robustness of companies in the EV ecosystem, including charging infrastructure providers and technology innovators. This transparency boosts confidence among institutional and retail investors alike. The launch also acknowledges the tireless efforts of engineers, researchers, and visionaries who have driven advancements in EV technology. From breakthroughs in battery technology to the development of smart mobility solutions, the index captures the collective strides that have revolutionized the automotive landscape. It is a fitting reward for those who have disrupted traditional norms and propelled the industry forward. For Indian EV startups, inclusion in the index is transformative. It enhances their visibility, making them more attractive to a broader investor base. This increased exposure can help startups secure funding, accelerate research and development, and scale their operations, bringing IPO aspirations within reach and driving further innovation and growth. Raptee Moreover, the index indirectly enhances customer confidence. As the index gains prominence, it signals to consumers that the EV sector is stable and promising. Seeing established companies and dynamic startups listed reassures potential buyers of the industry’s reliability, safety, and long-term viability. In essence, the Nifty EV & New Age Automotive Index is not just a financial tool but a catalyst for transformation. As India speeds towards a sustainable future, this index will benefit investors and consumers alike. Quote by Jayapradeep Vasudevan-a CBO

Future Market Developments

Several key developments are expected in the Indian EV market. Ola Technologies, a major player in electric two-wheelers, is set to list its shares on the stock exchanges soon. Additionally, Ather Energy and Hyundai Motor India are planning initial public offerings. Tata Motors has announced a significant restructuring plan to split into two publicly traded companies, focusing on commercial vehicles and passenger vehicles, including its EV business and Jaguar Land Rover.

These strategic initiatives highlight the evolving and dynamic nature of India’s electric vehicle market, indicating significant potential for future growth and innovation.

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