Nifty Pharma (NIFTY PHARMA) live share price today at NSE

Nifty Pharma Index - A Brief Introduction

Nifty Pharma is a sector-specific index of the National Stock Exchange (NSE) of India. It consists of a maximum of 20 NSE-listed securities from the pharmaceutical and biotechnology industries. The Nifty Pharma index focuses on capturing the real-time performance and behaviour of the Indian pharmaceutical sector and provides useful insights to investors. 

The index was launched on the 1st January 2005 with a base value and base date of 1000 and 1st January 2001, respectively. The Nifty Pharma Index chart clearly depicts that the index has grown significantly, surpassing its base value by more than 200% over the period. 

The Nifty Pharma stock list includes listed securities such as Ipca Laboratories Ltd.,  J.B. Chemicals & Pharmaceuticals Ltd., Laurus Labs Ltd., Lupin Ltd., Mankind Pharma Ltd., NATCO Pharma Ltd., and many other securities representing the pharmaceutical and biotech industry of India. 

The NSE Indices Limited, a wholly owned subsidiary of the NSE, is responsible for owning and operating the Nifty indexes. This organisation launched the Nifty Pharma index, too, and currently undertakes the management and governance of the index. 

Nifty Pharma Index - Formula and Calculation

Nifty Pharma Index is calculated using the free-float market capitalisation method, wherein the index value represents the aggregate free-float market cap of all the constituents. Here, free float refers to the outstanding equity shares of a company that are available for trading on the secondary market. To know more about the calculation of the Nifty Pharma index, refer to the formula below: 

Nifty Pharma Index Formula - Current free-float market cap / (base market cap * base index value)

Here, 

Base index value = 1000

Free-float market cap = shares outstanding * IWF * capping factor * price 

IWF = Investible weight factor 

The Nifty Pharma index is subject to a semi-annual rebalancing, with cutoff dates being 31st January and 31st July each year. For this periodic rebalancing, the average data for six months ending on the cutoff dates is considered. 

Nifty Pharma Index Stocks - Eligibility Criteria

To become eligible for the Nifty Pharma, companies have to meet the following eligibility criteria set by the index committee: 

1. The company must be domiciled in India and listed on the National Stock Exchange (NSE). 
2. If stocks representing a sector within the Nifty 500 fall below 20, then the remaining stocks are selected from the top 800 based on the average daily turnover and average daily full market cap based on the data of the average of the previous six months.
3. The companies must form part of the pharmaceutical sector and the Nifty 500 at the time of review. 
4. In the last six months, the company’s trading frequency should be at least 90%. 
5. As of the cutoff date, the company must have a minimum listing history of 1 month. 
6. The final selection of 20 stocks is based on free-float market capitalisation. At the time of selection, stocks available for trading on F&O are given preference. 
7. The weightage of each stock is capped at 33%, and the cumulative weightage of the top 3 stocks is capped at 62%. 

Nifty Pharma Index Historical Trend

Since its inception, the Nifty Pharma index has yielded over 13% price returns, with its total returns for the same period standing at 14.37%. For the last 1-year and 5-year duration, the index has given 14.08% and 17.03% price returns, respectively, against total returns of 14.82% and 17.84% for the same period. 

Key Takeaways on Nifty Pharma Index

1. Nifty Pharma Index is a sector-focused index of the NSE, launched on 1st January 2005. 
2. The index is designed to track and reflect the overall performance of India’s pharmaceutical sector. 
3. It has a base value of 1000 and is constituted of 20 stocks from the pharmaceutical and biotechnology sectors. 
4. The value of the Nifty Pharma index is calculated using the free-float market cap method.