The Nifty Commodities Index tracks the performance of a diversified portfolio of companies in the commodities segment, including sectors like oil, petroleum, cement, power, chemicals, sugar, and metals. It consists of 30 companies listed on the National Stock Exchange (NSE). The index is capped at 10% for any individual constituent when rebalanced. This index is used for purposes like fund benchmarking, launching index funds, ETFs, and structured products. Additionally, an Index Variant, the Nifty Commodities Total Returns Index, is available.
Portfolio Characteristic
The Nifty Commodities Index is composed of 30 companies listed on the National Stock Exchange (NSE) that represent sectors like Oil, Gas, Petroleum Products, Cement, Power, Chemicals, Metals, and Mining. The index is designed to track the performance of these sectors, reflecting the overall behaviour of India's commodities market. Weights for each index constituent are capped at 10% to avoid overconcentration. It is used as a benchmark for fund portfolios and launching ETFs, structured products, and index funds. The index undergoes rebalancing semi-annually.
Sector Representation
The index represents the sector-wise allocation of an investment portfolio. The largest allocation is to Oil, Gas & Consumable Fuels at 28.57%, followed by Metals & Mining (23.95%), and Power (23.94%), highlighting a significant focus on energy and industrial sectors. Construction Materials accounts for 15.07%, while Chemicals hold a 7.16% weight. The smallest sector represented is Capital Goods at 1.31%. This distribution indicates a focus on energy, raw materials, and industrial infrastructure investments.
Index constituents
The image showcases the top constituents of the Nifty Commodities Index by weightage. Reliance Industries Ltd. holds the highest weight at 9.69%, followed closely by NTPC Ltd. at 9.60%. Other major players include Tata Steel Ltd. with 6.39%, UltraTech Cement Ltd. at 6.16%, and Coal India Ltd. with 5.30%. Companies like Oil & Natural Gas Corporation Ltd., Hindalco Industries Ltd., Grasim Industries Ltd., JSW Steel Ltd., and Vedanta Ltd. make up the rest of the top constituents with weightages ranging from 3.98% to 5.28%.
In addition to the top companies like Reliance, NTPC, Tata Steel, and others, it includes other notable firms across sectors such as Adani Energy Solutions, Ambuja Cements, Bharat Petroleum, Hindustan Petroleum, Indian Oil Corporation, JSW Energy, Jindal Steel, NMDC, and Tata Power, among others.
Fundamental Analysis​​​​​​​
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Price-to-Earnings (P/E) Ratio: 20.84, indicating that investors are willing to pay ₹20.84 for every ₹1 of the company's earnings.
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Price-to-Book (P/B) Ratio: 2.62, suggesting the index is valued at 2.62 times its book value.
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Dividend Yield: 1.92%, reflecting the annual dividend return as a percentage of the share price.
Why Invest?
Investors seeking exposure to India's commodity-rich sectors can consider the Nifty Commodities Index as a viable option. Its diversified portfolio, solid performance, and strong backing by industry giants make it an attractive choice for those looking to capitalize on India's growth in energy, raw materials, and infrastructure.
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