Nifty Pharma Index Stock Weightage and Analysis in 2024

The following post is to understand nifty pharma index, it’s stock weightage and an overall general analysis of the sector.

What is Nifty Pharma Index ?

The Nifty Pharma Index, also known as the Nifty Pharma, is an index of the top pharmaceutical companies listed on the National Stock Exchange of India (NSE) that represents the pharmaceutical industry of India. It is similar to various stock market index like Nifty 50 and Bank nifty .The index was launched on November 9, 2015, and is managed and maintained by the India Index Services and Products Limited (IISL), a subsidiary of the NSE. Currently the Nifty Pharma Index has 20 stock constituents.

Nifty Pharma Index is computed using a free float market capitalization-weighted methodology. This means that the weight of each company in the index is proportional to its market capitalization, adjusted for the number of shares that are freely available for trading in the market. This methodology ensures that the larger and more influential companies have a greater impact on the performance of the index.

India plays an important role in the global pharmaceuticals and vaccine industry, often known as pharmacy of the word. India is also the largest provider of generic medicines globally. The country has a share of 20% in the global supply volume and contributes to around 60% of the global vaccines.

Nifty Pharma Index Stock Weightage in 2024

The complete nifty pharma index stocks list is given below. There are 20 stocks in the index. The highest weightage is given to Sun Pharmaceutical Industries at 26.74% followed by Dr. Reddy’s Laboratories at 12.28%. The lowest weightage is given to Granules Ltd at 0.99%.

No.	Company Name	Weightage (%)
1	Sun Pharmaceutical Industries Ltd	26.74%
2	Dr. Reddy’s Laboratories Ltd	12.28%
3	Cipla Ltd	12.19%
4	Divi’s Laboratories Ltd	6.98%
5	Lupin Ltd	6.14%
6	Aurobindo Pharma Ltd	4.54%
7	Alkem Laboratories Ltd	4.04%
8	Torrent Pharmaceuticals Ltd	3.82%
9	Zydus Lifesciences	3.74%
10	IPCA Laboratories Ltd	2.52%
11	Laurus Labs Ltd	2.51%
12	Abbott India Ltd	2.37%
13	Glenmark Pharmaceuticals Ltd	2.17%
14	Biocon Ltd	1.93%
15	Gland Pharma Ltd	1.92%
16	Natco Pharma Ltd	1.42%
17	GlaxoSmithKline Pharmaceuticals Limited	1.39%
18	Sanofi India Ltd	1.21%
19	Pfizer Limited	1.09%
20	Granules India Ltd	0.99%

Nifty Pharma Index Historical Performance

Since inception the Nifty Pharmaceutical index has given a return of 12.83%. Since the index is calculated in real time please check the latest price for an accurate index return.

The base date for the index is November 1, 2005, and the base value is set at 1,000.

Eligibility Criteria for Stocks to Be Added to the Nifty Pharma Index

1. 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 deficit number of stocks shall be selected from the universe of stocks ranked within 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.
2. The Company/Stock should be a part of pharmaceutical sector.
3. The company’s trading frequency should be at least 90% in the last six months.
4. 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 a 3 month period instead of a 6 month period.
5. Final selection of 20 companies shall be done based on the free-float market capitalization of the companies. Preference shall be given to companies that are available for trading in NSE’s Futures & Options segment at the time of final selection
6. 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 weightage of top 3 stocks cumulatively shall not be more than 62% at the time of rebalancing.

Index Rebalancing

Index is re-balanced on semi-annual basis. The cut-off date is January 31 and July 31 of each year, i.e. For semi-annual review of indices, average data for six months ending the cut-off date is considered. Four weeks prior notice is given to market from the date of change.

Index Governance

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.

How to invest in Nifty Pharma Index

You can invest in Nifty Pharma Index by buying the stocks at their current weightage but the weightages tend to change regularly and it can be quite costly for a normal investor so the best method is to invest in Nifty Pharma ETF which are listed in the next section.

List of Nifty Pharma Index ETF’s

• Nippon India ETF Nifty Pharma
• ICICI Prudential Nifty Pharma ETF
• SBI ETF Nifty Pharma
• Aditya Birla Sun Life Pharma & Healthcare Fund
• HDFC Healthcare Fund
• Kotak Pharma & Healthcare Fund

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