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About NIFTY Realty


NIFTY Realty is a share market index that represents the performance of the real estate sector. It is a part of the National Stock Exchange of India (NSE) and includes real estate companies listed on the exchange.

The index serves as a benchmark for investors and traders to track the performance of the real estate sector in India. The constituent companies are engaged in various aspects of the real estate business such as property development, construction and related activities.

Investors and traders use sector-specific indices like NIFTY Realty to look at the health and direction of specific industries. This helps them make better decisions about investments in real estate stocks. The index value is calculated based on the market capitalisation and stock prices of the companies included.


What is the NIFTY Realty Index?


The NIFTY Realty index, a sector-specific index on the NSE, monitors the real estate sector's performance in the Indian economy in real-time. It comprises 10 stocks involved in real estate property construction and focuses on companies dealing with residential and commercial projects.

History


NIFTY Realty index was launched on August 30, 2007. Its base date was December 29, 2006, with a base value of 1,000. The index undergoes semi-annual re-balancing.

The index operates within a three-tier structure. It is owned and managed by NSE Indices Limited, earlier known as India Index Services and Products Limited. The three-tier structure includes the Board of Directors of NSE Indices, the Index Advisory Committee and the Index Maintenance Sub-Committee.


Index Re-Balancing


NIFTY Realty Index re-balancing occurs on a semi-annual basis. The cut-off dates are January 31 and July 31 each year. During the semi-annual review of indices, the average data for the six months leading up to the cut-off date is taken into consideration. A notice period of four weeks is provided to the market, starting from the date of the planned change. This systematic process ensures that the index remains reflective of the current market conditions and facilitates an orderly adjustment for market participants.

This re-balancing ensures that the index remains representative of the overall market performance. If needed, this gives greater importance to companies that have showcased good growth and profitability.


Companies and Weightage


As of the end of 2023, the NIFTY Realty index was comprised of various constituents, each contributing to the overall performance of the index. Notable companies with significant weightage included DLF Limited, contributing 27.34%, Macrotech Developers Limited at 14.43% and Godrej Properties Limited with a weightage of 13.42%.The index further comprised Phoenix Mills Limited, holding a weightage of 12.20%, Oberoi Realty Limited contributing 9.82% and Prestige Estates Projects Limited with a weightage of 9.67%. Brigade Enterprises Limited, Mahindra Lifespace Developers Limited, Swan Energy Limited and Sobha Limited held weightage of 6.54%, 2.36%, 2.13% and 2.08% respectively.

Selection Criteria


  • Companies must be actively listed on the National Stock Exchange (NSE).
  • Eligible entities are those included in the NIFTY 500 index.
  • Inclusion in the NIFTY Realty index is limited to companies operating within the realty sector.
  • Stocks must have maintained a trading frequency of at least 90% over the previous six months.
  • Companies must have a listing history of at least six months on the NSE.
  • Recently listed companies (IPOs) meeting eligibility criteria can be included for three months.
  • Companies must adhere to the caps of 33% for a single stock and 62% for the cumulative top 3 stocks during the rebalancing process.
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