Understanding Nifty Auto in India

Stock market investors keep a tab on relevant indices at all times. These indices allow investors to measure the performance of the market. While generic indices are common, investors often require sector indices. Nifty Auto is one of the popular sector indices for investors in India. It allows us to analyse the performance of the automobile industry in India as a whole. Read on to understand the Nifty Auto index in detail.

What is the Nifty Auto?

As discussed above, its allows us to gauge the performance of the Indian automobile industry. It is a sectoral index that helps analysts determine the performance of the automobile industry, employment opportunities, investment returns, and more. It is extremely important for investors wanting to take chances of investing in the Indian automobile industry. Many investors rely on this  index for benchmarking and investment research.

This is owned and managed by the NSE. It is a part of the Nifty index series launched by the NSE to monitor the performance of different industry sectors. The Nifty Auto index consists of some of the top automobile manufacturers in the country. It includes the stocks of top players in the automobile industry and represents their performance as a whole. Since the Nifty is popular, several financial institutions have launched associated/linked investment products.

What are the Constituents of Nifty Auto?

Like any other sectoral index, the Nifty Auto index has some participants. Each constituent has a fixed weightage in the overall index value. The weightage of each constituent is decided based on numerous factors. Currently, the Nifty Auto index has 15 participants contributing to the overall value. These participants are top players in the automobile industry, including manufacturers of cars, heavy vehicles, motorcycles, etc.

Some of these participants are auto ancillaries and parts manufacturers. For instance, a few companies included in the Nifty Auto index are known to be the best tyre manufacturers in India. The index tracks the performance of the stocks of the fifteen participants.

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When the stocks of the Nifty constituents perform  well, the index value rises. On the other hand, the value of the index goes down when stocks of included companies don’t perform well. Since this index includes the top players, the index value can represent the performance of the entire automobile industry in India. You can find stocks of companies included in the Nifty Auto index on the NSE for trading. Investors interested in the automobile industry can check the index to make informed decisions. It serves as a great benchmarking tool for investors in the automobile industry.

Nifty Auto stocks are popular among investors, both retail and institutional. For the same rationale, financial institutions have launched several products for investors linked to the index. For instance, you can find collective investment schemes that track the performance of this. Before you start using the Nifty Auto index for trading, let us discuss the index constituents.

• Ashok Leyland

  Headquartered in Chennai, Ashok Leyland is among the biggest automobile manufacturers in India. They are known for producing the best commercial vehicles in the country, like trucks and buses. They also have made impactful defence vehicles over the years. It has built an international presence and exports light commercial vehicles to many countries. The weightage of Ashok Leyland stocks in the index based on the current market cap is 3.30%.

• Bajaj Auto

  When it comes to manufacturers of two and three-wheelers in India, Bajaj Auto is among the best companies. Established in 1945, Bajaj Auto has grown to become the largest two-wheeler manufacturing company. The weightage of Bajaj Auto stocks in the Nifty is 10.57%.

• Balkrishna Industries

  Balkrishna Industries is among the oldest and best-performing companies in the automobile industry. Established in 1987, it has grown to become one of the biggest tyre manufacturers in the country. The current weightage of Balkrishna Industries stocks in the Nifty Auto index is 3.13%.

• Bharat Forge

  Bharat Forge has been providing forged components to the automobile industry for many years. It provided connecting rods, crankshafts, and other forged components to the players in the automobile industry. Besides supplying products in the Indian automobile market, it also exports forged components to foreign markets. The current weightage of Bharat Forge stocks in the Nifty Auto index is 3.27%.

• Bosch

  Bosch is a multinational company indulged in the field of technology and engineering. It is an active supplier of automobile components around the world. Bosch India is known to offer innovative mobility solutions. The current weightage of Bosch stocks in the Nifty Auto is 3.91%.

• Eicher Motors

  Eicher Motors has made its name by manufacturing the best heavy commercial vehicles in India. It is also among the biggest motorcycle manufacturers in India. The ‘Royal Enfield’ brand of Eicher Motors is among the classic motorcycle brands in the country. The current weightage of Eicher Motors stocks in the Nifty Auto index is 6.64%.

• Hero MotoCorp

  Established in 1984, Hero MotoCorp has become one of the world’s largest two-wheeler manufacturing entities. A vast majority of middle-class individuals in India prefer motorcycles and scooters produced by Hero MotoCorp. It also produces premium motorcycles for other sections of the society. The current weightage of Hero MotoCorp stocks in the Nifty Auto index is 4.47%.

• MRF

  MRF is among the biggest tyre manufacturers in the country. Headquartered in Chennai, MRF produces tires for cars, motorcycles, trucks, and other vehicles. It even produces reliable tires for agricultural and utility vehicles. The current weightage of MRF stocks in the Nifty Auto index is 2.98%.

• Mahindra & Mahindra

  Originating in India, Mahindra & Mahindra has now become a multinational conglomerate. It is among the biggest manufacturers of two-wheelers and commercial vehicles in India. It offers several models of SUVs, trucks, and electric vehicles. The current weightage of Mahindra & Mahindra shares in the Nifty Auto index is 12.17%.

• Maruti Suzuki India

  Maruti Suzuki came into existence when Suzuki Motor Corporation joined hands with the Indian government in 1981. The company has become a leading player in the automobile industry over the years. It is known for its wide variety of cars, including SUVs, sedans, and hatchbacks. It is also known to produce cars that are affordable to everyone in India. The current weightage of Maruti Suzuki shares in the Nifty Auto index is 20.02%.

• Motherson Sumi Systems

  Motherson Sumi Systems was formed when a Japanese and an Indian company joined hands in 1986. It has now become one of the leading manufacturers of automobile components in India. It produces rear-view mirrors, harnesses, and other automobile components in India. The current weightage of Motherson Sumi Systems in the index is 3.74%.

• Sona BLW Precision Forgings

  When it comes to forged components for automobiles, you cannot ignore Sona BLW Precision Forgings. It is best known for the supply of differential assemblies and bevel gears to automobile manufacturers. The current weightage of Sona BLW Precision Forgings in the Nifty Auto index is 2.10%.

• TVS Motor Company

  TVS is one of the biggest players in two- and three-wheelers. The company is part of the TVS Group and manufactures scooters and motorcycles. It even produces mopeds for riders in India. Its Scooty range includes some popular models like Jupiter and Ntorq. TVS Motor Company often receives accolades for its innovative work in the automobile industry. The current weightage of TVS Motor Company in the Nifty Auto index is 5.39%.

• Tata Motors

  Tata Motors is a key member of the Tata Group in India. It is a multinational company that manufactures cars, both manual and electric. It is also among the biggest producers of commercial and utility vehicles in India. Over the years, Tata Motors has built an international presence. It even has manufacturing plants outside India and is involved in exports. The company also produces luxury cars like the Jaguar Land Rover. The current weightage of Tata Motors stocks in the Nifty Auto index is 14.10%.

• Tube Investments of India

  Tube Investments of India is best known for its wide range of bicycles. It is among the biggest bicycle manufacturers in India, with brands like Hercules and Montra. Tube Investments of India is also an engineering company that extends its help to automobile manufacturers. It comes up with automobile components and innovative solutions for existing problems in the industry. The current weightage of Tube Investments of India in the index is 4.22%.

Trading in the Nifty Auto Index

You can use the Nifty Auto index chart to make trading decisions. However, you aren’t allowed to invest directly in the Nifty Auto index. A market index is only used for benchmarking and investment research. A market index is only a benchmarking tool, not a financial security. However, investors can find several financial products that are linked with the Nifty Auto index. For instance, one can find ETFs or mutual fund schemes linked with the Nifty Auto index.

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Conclusion

The Nifty Auto index is a great tool for investors in the automobile industry. It works as a medium for benchmarking and informed decision-making. The index includes the top fifteen companies in the automobile industry that are also listed on the NSE. One can gauge the performance of the entire automobile industry in India with the help of this index. Check the Auto Nifty index value now!