Nifty Realty

NIFTY Realty is a stock market index in India that monitors the performance of the real estate sector. It reflects the overall market trends by tracking listed companies engaged in property development, construction, and real estate investment. This index provides valuable insights for investors, helping them assess sector growth, identify opportunities, and make informed decisions. By analysing NIFTY Realty, market participants can gauge real estate market movements, economic influences, and industry trends. It serves as a benchmark for evaluating the sector’s financial health and investment potential, making it a crucial tool for traders and investors looking to navigate the real estate market efficiently.

NIFTY Realty tracks the performance of India's real estate sector by monitoring 10 listed companies involved in property development. It is weighted based on free-float market capitalisation and rebalanced semi-annually. Stocks must meet specific criteria, including trading frequency and market capitalisation. The index helps investors gauge sector trends, serving as a benchmark for investment decisions. Variants like the NIFTY Realty Total Returns Index support ETFs and structured investment products.

NIFTY Realty is a sectoral index on the National Stock Exchange (NSE) that tracks the real estate sector’s performance in India in real time. It consists of 10 stocks from companies involved in residential and commercial real estate development. Launched on August 30, 2007, with a base date of December 29, 2006, and a base value of 1000, its value has since declined to around 400 at ~52 P/E multiples. Reconstituted semi-annually, it adapts to industry changes. Managed by NSE Indices Limited, it follows a three-tier governance structure. A variant, the NIFTY Realty Total Returns Index, supports ETFs, index funds, and structured investment products.

The NIFTY Realty share price is calculated by weighting its 10 constituent stocks based on periodically capped free-float market capitalisation, relative to a base market value, in real time.

To qualify for inclusion, a stock must:

• Be listed on the NSE.

• Be part of NIFTY 500.

• Belong to the realty sector.

• Have at least 90% trading frequency in six months.

• Have a six-month listing history (or three months for IPOs).

• Maintain a cap of 33% for a single stock and 62% for the top three stocks at rebalancing.

If fewer than 10 stocks qualify, the top 800 ranked by turnover and market capitalisation are considered.

The NIFTY Realty index value is calculated using:

Index value = Current market capitalisation / (Base market capitalisation × Base Index Value).

It is rebalanced semi-annually based on six months of data, with cutoff dates on 31st January and 31st July. Any stock replacements take effect on the last trading day of March and September, with a four-week prior notice to the market.

Investing in NIFTY Realty offers exposure to India's growing real estate sector, providing diversification across top realty companies. It allows investors to benefit from sectoral growth without directly owning property. The index is periodically rebalanced, ensuring updated stock selection. It also serves as a benchmark for realty-focused funds, helping investors track market trends. Additionally, its liquidity and inclusion in ETFs and structured products make it accessible for portfolio diversification.