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Here in this article, we’ve covered what is Nifty Pharma, the Weightage of each pharma company in the Nifty Pharma Index, and how the Nifty Pharma Stock weightage is calculated.
So without any ado, let’s take a deep look into the Nifty Pharma Index and what are the components of it.
NIFTY Pharma Companies Index
The Nifty Pharma Index is a stock market index that tracks the performance of the pharmaceutical sector in India. The index includes companies that are engaged in the manufacture and sale of pharmaceutical products, including both branded and generic drugs.
The index is a part of the Nifty 50, which is the flagship index of the National Stock Exchange of India. The Nifty Pharma index has been one of the best-performing indices in the Indian stock market in recent years. This is primarily due to the strong growth of the best Indian pharmaceutical companies, which has been driven by the country’s vast population and growing middle class.
How Nifty Pharma Weightage is Calculated?
NIFTY Pharma Index captures the performance of the pharmaceutical sector. The Index comprises 20 companies listed on the National Stock Exchange of India (NSE).
NIFTY Pharma Index is computed using the 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 a particular base market capitalization value.
NIFTY Pharma Index can be used for a variety of purposes such as benchmarking fund portfolios and launching index funds, ETFs, and structured products.
- Base Date: January 01, 2001
- Base Value: 1000
- Launch Date: July 01, 2001
- No of Constituents: 10
Nifty Pharma Stock Weightage
There is a total of 10 major components covered under Nifty Pharma. Here are the top pharma companies in Nifty Pharma:
|Sun Pharmaceutical Industries Ltd.||24.65|
|Dr. Reddy’s Laboratories Ltd.||12.09|
|Divi’s Laboratories Ltd.||10.32|
|Laurus Labs Ltd.||4.00|
|Torrent Pharmaceuticals Ltd||3.64|
|Alkem Laboratories Ltd.||3.47|
|Aurobindo Pharma Ltd.||3.40|
|Ipca Laboratories Ltd.||2.78|
Nifty Pharma Index Chart
This is the Nifty Pharma Index’s performance since its establishment on a monthly timeframe.
Nifty Pharma Index Fundamentals
Eligibility Criteria for Nifty Pharma Weightage
Here are the eligibility criteria for the major pharma sectoral index:
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 20, then the deficit number of stocks shall be selected from the universe of stocks ranked within the top 800 based on both average daily turnover and average daily full market capitalization based on previous six months period data used for index rebalancing of NIFTY 500.
Companies should form a part of the pharmaceutical sector. The company’s trading frequency should be at least 90% in the last six months. 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 3 months instead of 6 months.
The final selection of 20 companies shall be done based on the free-float market capitalization of the companies. A preference shall be given to companies that are available for trading in NSE’s Futures & Options segment at the time of final selection.
The 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 the weightage of the top 3 stocks cumulatively shall not be more than 62% at the time of rebalancing.
The index is re-balanced on a semi-annual basis. The cut-off date is January 31 and July 31 of each year, i.e. For the semi-annual review of Indices, average data for six months ending the cut-off date is considered. Four weeks prior notice is given to the market from the date of the 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.
What is the Nifty Pharma Index?
The Nifty Pharma Index is a stock market index that tracks the performance of pharmaceutical companies listed on the National Stock Exchange of India.
What companies come under NIfty Pharma?
The companies that come under nifty pharma are Dr. Reddy’s Laboratories, Sun Pharmaceutical Industries, Lupin, Glenmark Pharmaceuticals, Cadila Healthcare, Aurobindo Pharma, and Cipla.
Which stock has the highest weightage in Nifty Pharma?
The stock with the highest weightage in Nifty Pharma is Sun Pharmaceutical Industries Ltd. with 24.65% of Nifty Pharma Weightage.
How to invest in the NIFTY Pharma Index?
You can invest in the NIFTY Pharma Index through exchange-traded funds (ETFs) or index mutual funds.
End Notes on Nifty Pharma Stocks Weightage
The Indian pharmaceutical industry is expected to continue to grow at a rapid pace in the coming years, and the Nifty Pharma index is likely to continue to outperform the broader market. Investors looking for exposure to the Indian pharmaceutical sector can consider investing in the Nifty Pharma index.
The index offers a good way to gain exposure to a large number of companies in the sector, and it is likely to continue to outperform the broader market in the future. The Nifty Pharma index is a good way to gain exposure to the Indian pharmaceutical sector.
The index offers a good way to gain exposure to a large number of companies in the sector. The index is likely to continue to outperform the broader market in the future.