Nifty metal share prices

Understanding the Nifty Metal Index Before Picking Metal Stocks in 2024

India is known for its abundance of natural resources. According to reports, India’s metal exports totalled $447 billion in FY2023. Investing in the metal sector makes sense. However, if you don’t want to spend time researching metal industry stocks, you can invest directly in the Nifty Metal Index. If you are wondering what this index is about, this article will help you.

Understanding the Nifty Metal Index

The Nifty Metal Index represents the performance and behavior of India’s metals sector. It includes copper, steel, and aluminum manufacturing and processing companies. This index was introduced on October 1, 2007, with January 1, 2004, as its base year.

This index comprises 15 NSE-listed companies, with weightage mainly in metal and mining, which contribute 94.11% of the index, while capital goods share the remaining.

The Metal index is under the purview of the Index Maintenance Subcommittee, the Index Advisory Committee, and the NSE Indices BOD.

The Nifty Metal Index is a variation of the Nifty Metal Total Returns Index. This variant considers both price movements of the constituent stocks and reinvests the dividends these companies paid.

Criteria for Nifty Metal Stock Selection

  • The fundamental requirement is the stock listing on the NSE.
  • The stock must be part of the Nifty 500 index when it undergoes review.
  • Nifty metal companies must have had a trading frequency of at least 90% in the previous six months. This ensures that only stocks with sufficient liquidity are included in the index.
  • If the count of qualifying stocks from the metals sector within the Nifty 500 index drops below 10, further stocks are chosen from those ranked in the top 800, considering their average daily turnover and full market capitalisation. This data is taken from the previous six months period used for index rebalancing.
  • The index is determined using the free float market capitalisation method.
  • A company should have a listing history of at least six months on the NSE.
  • The Nifty Metal Index is rebalanced semi-annually, ensuring it continues to reflect the sector’s current state.
  • For recent IPOs, the qualifying criteria apply for three months instead of six.
  • Preferably, the stock trades on NSE’s derivative segment.

Constituent of Nifty Metal Index

Company NameSymbolIndustry 
APL Apollo Tubes Ltd.APLAPOLLOCapital Goods
Adani Enterprises Ltd.ADANIENTMetals & Mining
Hindustan Copper Ltd.HINDCOPPERMetals & Mining
Hindalco Industries Ltd.HINDALCOMetals & Mining
Hindustan Zinc Ltd.HINDZINCMetals & Mining
Jindal Stainless Ltd.JSLMetals & Mining
JSW Steel Ltd.JSWSTEELMetals & Mining
NMDC Ltd.NMDCMetals & Mining
Jindal Steel & Power Ltd.JINDALSTELMetals & Mining
National Aluminium Co. Ltd.NATIONALUMMetals & Mining
Ratnamani Metals & Tubes Ltd.RATNAMANICapital Goods
Tata Steel Ltd.TATASTEELMetals & Mining
Steel Authority of India Ltd.SAILMetals & Mining
Welspun Corp Ltd.WELCORPCapital Goods
Vedanta Ltd.VEDLMetals & Mining

Conclusion

The Nifty Metal Index is a great option if you are considering metal stocks. This index tracks the performance of key metal companies and is managed carefully. However, knowing the risks associated with Nifty metal share prices, market volatility, economic conditions, currency fluctuations, regulations, technological changes, interest rates, geopolitical tensions, and operational issues is essential. To invest or trade in stocks, open an account with Dhan.

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