NSE launches Nifty Chemicals Index to track sector performance

NSE Indices, a subsidiary of the National Stock Exchange (NSE), has launched the Nifty Chemicals Index, a sectoral index designed to monitor the performance of leading companies in the chemicals industry.

The index comprises the top 20 stocks from the Nifty 500 that belong to the chemicals sector, selected based on their six-month average free-float market capitalization. Priority is given to stocks that are actively traded in NSE’s derivatives segment.

Stock weightage in the index is determined by free-float market capitalization, with individual stocks capped at 33%, while the top three stocks collectively cannot exceed 62%. The index has been assigned a base date of April 1, 2005, with a base value of 1000. It will undergo a semi-annual reconstitution and quarterly rebalancing to maintain alignment with market trends.

Performance data reveals that the Nifty Chemicals Index delivered a 5.67% total return over the past year (as of February 28, 2025), with a 19.71% Compound Annual Growth Rate (CAGR) since inception.

Among the key constituents are Pidilite Industries (13.35%), SRF (13.24%), UPL (10.45%), PI Industries (7.98%), and Solar Industries India (6.92%).

The index is expected to act as a benchmark for asset managers and serve as a reference for passive investment vehicles, including Exchange Traded Funds (ETFs), index funds, and structured financial products.