NIFTY REALTY

This specific real estate sector in India is witnessing significant growth. Also, its recent dynamics of the market reflected the opportunity of creating wealth across real estate companies, and as proven by recent listings of the real estate companies resulting in prominent growth in both public funds and private equity. The primary growth thrust is coming due to the favorable demographics, and increasing purchasing power, and also the existence of customer-friendly banks & housing finance companies, professionalism in the real estate sector and the favorable reforms being initiated by the government for attracting global investors. Also, further being necessitated by the thrust of the redevelopment of building townships and redeveloping mill lands, old buildings, and one can easily witness plenty of opportunities in the real estate sector backed by the favorable tax regime. Also, NSE Indices have developed the Nifty Realty Index to synergize such emerging opportunities along with their Index expertise by creating new investment avenues for the investors. It is also explicitly designed to reflect the behavior and performance of Real Estate companies. The Index comprises 10 companies listed on the National Stock Exchange of India (or NSE). Also, NIFTY Realty Index is being computed using the free-float market capitalization method, in which the level of the index completely reflects the total free-float market value of entire stocks in the index relative to a specific base market capitalization value. It can also be used for several purposes, such as the launching of index funds, benchmarking fund portfolios, and ETFs and structured products. The Eligibility Criteria for the Selection of Constituent Stocks:

• The companies must rank within the top 800 based on both average daily turnover as well as average regular full market capitalization for the last 6 months.
• Also, the companies should form a part of the Realty Sector.
• Its trading frequency should be at least 90% in the previous 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 if it accomplishes the normal eligibility criteria for the index of 3 months instead of 6 months.
• Also, the final selection of 10 companies shall be made based on the free-float market capitalization.
• The weightage of every stock in the index is to be calculated based on its free-float market capitalization in such a way that no single stock should be more than 34%, and the weightage of the top 3 stocks 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.