Introduction
Pharmaceutical companies plays a significant role in capital market of a country. This write up is about presence of pharmaceutical companies in Indian capital market. Indian pharmaceutical industry is the third largest in the world by volume and valued at 50 billion dollar.
The government of India has incentivised the global and domestic players to enhance investment and production in pharma sector for achieving a higher objective of affordable healthcare in the country and globally on a sustained basis.(see schemes)
Nifty Pharma Index in National Stock Exchange of India (NSE) represents performance of the pharmaceutical sector in Indian capital market. The Index consists of 20 companies listed on National Stock Exchange of India (NSE). A professional team from Board of Directors of NSE Indices Limited, the Index Advisory Committee (equity ) and the Index Maintenance Sub Committee manages the pharma Index. Nifty Pharma Index is mainly used for,
- Benchmarking fund portfolios.
- Launching of index funds, ETFs and structured products.
Eligibility criteria for listing stocks to Nifty pharma index.
- Companies should form part of Nifty 500 at the time of review.
- The Companies should form a part of pharmaceutical sector.
- The company's trading frequency should be at least 90% in the last 6 months.
- The Company shall have a minimum listing history of one month as on the cutoff date.
- Final selection of 20 companies shall be done based on the free-float market capitalization of the companies. However companies available for trading in NSE’s Futures & Options segment will be given weightage at the time of final selection.
- Weightage of each stock in the index is calculated based on its free-float market capitalization in such a way that no single stock shall be more than 33% and weightage of top 3 stocks cumulatively shall not be more than 62% at the time of rebalancing.