NSE Indices, a subsidiary of the National Stock Exchange of India (NSE) in its latest announcement, reported the launch of a new thematic index, the Nifty EV & New Age Automotive index. This index is designed to track the performance of companies involved in the electric vehicle (EV) ecosystem and those pioneering new-age automotive technologies. Announced on May 30, this development aligns perfectly with India's push towards sustainable transportation and innovative automotive solutions.
Key Features of the Nifty EV & New Age Automotive Index
The base date for the Nifty EV & New Age Automotive index is April 2, 2018, with an initial base value set at 1,000. The will undergo reconstitution semi-annually and will be rebalanced quarterly. The criteria for inclusion in this index stipulate that eligible companies must be part of the Nifty 500 and actively engaged in the production and supply of EVs, new-age automotive vehicles, batteries, components, raw materials, or related technologies.
Currently, the index includes prominent companies such as:
Amara Raja Energy & Mobility and Exide Industries Ltd (EV battery manufacturers)
Bajaj Auto Ltd, Hero MotoCorp Ltd, Olectra Greentech Ltd, TVS Motor Company Ltd, and Tata Motors Ltd.
Aligning with Government Initiatives
The launch of this index comes amidst the Indian government's robust efforts to promote EV adoption and establish India as a key manufacturing hub for cutting-edge automotive technology. The government’s initiatives aim to boost investments in the sector, ensuring the country remains at the forefront of the global EV market.
Market Impact and Investment Opportunities
Mukesh Agarwal, CEO of NSE Indices, emphasized the innovative nature of this index, marking it as India’s first-ever electric vehicle index. He highlighted how this new index will facilitate the creation of investment products, providing asset managers with an opportunity to delve into the EV and new-age automotive market. This move is expected to spawn various passive investment vehicles such as Exchange Traded Funds (ETFs), index funds, and structured products, offering investors a direct route to benefit from the growing EV sector.
Electric Vehicle Performance
Electric two-wheeler sales in India experienced a 30.06% growth in FY2024, with total sales reaching 9,47,087 units. This increased their market share from 4.5% in FY2023 to 5.4% in FY2024. Despite established players like Okinawa, Hero Electric, and Revolt seeing significant declines, companies like Greaves Electric Mobility and Hero MotoCorp saw remarkable growth. Greaves Electric Mobility's sales skyrocketed by 2930.33%, and Hero MotoCorp's sales surged by 1780.23%. Ola Electric maintained the top spot with 3,29,237 units sold, marking a 115.48% growth, while TVS Motor Company saw a 122.84% increase with 1,82,969 units sold.
In February 2024, the OEM-wise sales of electric four-wheelers (E-4W) showed significant variability among manufacturers. Tata Motors led the market with 4,878 units sold, capturing a dominant market share of 68.53% despite a 15% decline from January. MG Motor followed with 1,039 units sold and a 14.60% market share, experiencing a 12% drop. Mahindra & Mahindra, with 612 units, saw a 21% decrease, holding 8.60% of the market. BYD India and Hyundai Motor faced declines of 11% and 31%, respectively, maintaining smaller market shares.
Future Prospects
One noteworthy mention is Ola Electric, India’s leading electric two-wheeler manufacturer, which is preparing for a substantial IPO estimated at over INR 5,500 crore. This reflects the burgeoning interest and confidence in the EV sector, further validated by the introduction of the Nifty EV & New Age Automotive index. Other than Ola Electric many more companies are coming with their IPO from the EV space such as Hyundai Motors, Tata Electric Electric Mobility and Ather Energy.
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Ather Energy has recently raised 400 crores from Nikhil Kamath of Zerodha.
The creation of this index not only provides a benchmark for asset managers but also signals a pivotal shift towards embracing sustainable and technologically advanced automotive solutions. The Nifty EV & New Age Automotive index stands as a testament to NSE's commitment to offering innovative investment solutions in line with contemporary market trends.
With this launch, investors now have a structured avenue to invest in and gain from the evolving landscape of electric vehicles and new-age automotive technologies, positioning themselves advantageously in a market poised for significant growth.
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