Nifty Metal Index Stocks to Look Out For in NSE 2023
Welcome to the world of financial markets, where fortunes rise and fall, and opportunities abound! In the dynamic world of stock trading, where industries and sectors intertwine, one that stands tall and holds tremendous significance is Nifty Metal NSE. As one of the prominent indices in the Indian stock market, Nifty Metal holds a significant position. It captures the performance of metal-related companies. It’s a unique and fascinating index that encompasses a diverse range of metal-based companies. Beginning from steel and aluminium to copper and zinc. Let’s have a look at it to understand the Nifty metal companies list and how it works.
What is Nifty Metal Index?
The Nifty Metal Index is a stock market index in India that tracks the performance of metal-related companies listed on the National Stock Exchange (NSE). It was launched on October 1, 2007, and is a part of the broader Nifty index family. The index comprises 15 tradable companies listed on the NSE, primarily focused on two sub-sectors: Metals & Mining (94.11%) and Capital Goods (5.89%).
The Nifty Metal Index includes companies from various metal industries, such as steel, aluminium, copper, and other manufacturers and processors. The index is owned and managed by India Index Services and Products Ltd. (IISL), a subsidiary of NSE. As an essential benchmark for the metal sector, the Nifty Metal Index NSE helps investors and traders gauge the overall performance and trends in the Indian metal industry.
Additionally, a variation of NIFTY Metal exists as the NIFTY Metal Total Returns Index. This index finds practical use in launching ETFs, index funds, structured investment products, and as a benchmark for fund portfolios.
What are the Criteria for Selecting Nifty Metal Stocks?
For a security to be included in the NIFTY Metal Index NSE, it must fulfil several eligibility criteria:
- The security should be listed on the National Stock Exchange (NSE).
- It should be a part of the NIFTY 500 index.
- If the number of eligible stocks falls below 10, additional stocks will be selected from the top 800 ranked stocks based on average daily turnover and average daily full market capitalization data from the NIFTY 500 universe over the previous six months.
- The security should belong to the Metals sector.
- It should have a trading frequency of at least 90% in the past six months.
- The listing history of the security should be at least six months.
- Preferably, the security should be traded on NSE’s Futures and Options (F&O) segment.
- A recently listed company (IPO) can be included if it meets the eligibility criteria for three months instead of six months.
- During rebalancing, individual stocks should not exceed a cap of 33%, and the cumulative cap for the top 3 stocks should not exceed 62% of the index.
What is the Weightage and Significance of Nifty Metal Stocks NSE?
The NIFTY Metal share price is determined by assigning weights to its 15 constituent stocks based on periodically capped free-float market capitalization in comparison to a base market capitalization value. Essentially, stocks with higher market capitalization have a larger nifty metal stocks weightage in the index, while those with lower market capitalization have a smaller nifty metal index weightage.
The index value is calculated as follows –
Index value = Current market capitalization/ (Base market capitalization x Base Index Value)
Here is a sectoral representation:
The Nifty weightage is performed in real-time to reflect the current market conditions accurately. Thus, the importance of Nifty Metal stocks in NSE stem from their representation of the metal sector in the Indian stock market. Consequently, fluctuations in the performance of these stocks offer valuable insights into the overall condition and trends of the metal industry in India.
If you’re wondering what companies are included in the nifty metal share list, then the next section is for you.
Top Nifty Metal Stock List
Below we have listed out the best Nifty metal companies list with their nifty metal stocks list weightage so that you can easily invest in the nifty metal index NSE. However, you can also check share price of these stocks at smallcase in real time. For now, check out our chart of the top nifty metal stocks:
| Company Name | Freefloat Market Cap | Market Price |
|---|---|---|
| Hindalco Industries Ltd | ₹111911 Cr | ₹497.3 |
| Vendata Ltd | ₹88934 Cr | ₹239.4 |
| Tata Steel Ltd | ₹152952 Cr | ₹124.3 |
| Steel Authority of India Ltd | ₹36873 Cr | ₹90.3 |
| National Aluminium Co Ltd | ₹17038 Cr | ₹92.6 |
| Hindustan Zinc Ltd | ₹129865 Cr | ₹305 |
| Ratnamani Metals and Tubes Ltd | ₹24375 Cr | ₹3496.55 |
| Hindustan Copper Ltd | ₹15269 Cr | ₹156.7 |
| Adani Enterprises Ltd | ₹251752 Cr | ₹2146.7 |
| JSW Steel Ltd | ₹187945 Cr | ₹762 |
What are the Factors Influencing Nifty Metal Stocks?
The performance of Nifty Metal stocks NSE is influenced by four key factors:
- Commodity Prices: Fluctuations in the prices of metals like steel, aluminium, and copper in the commodity market directly impact Niftymetal stocks’ performance. Changes in commodity prices affect the revenue and profitability of metal companies, influencing their stock prices.
- Global Demand and Economic Conditions: Nifty Metal stocks are sensitive to the global demand for metals. Economic conditions and industrial activity in these countries can affect metal consumption and, consequently, impact the performance of metal stocks NSE.
- Government Policies and Regulations: Government policies, tariffs, and regulations influence the metal industry’s performance significantly. Changes in trade policies, import/export duties, or environmental regulations can impact profitability.
- Currency Movements: These stocks are export-oriented, so currency movements, particularly fluctuations in the Indian Rupee against major currencies like the US Dollar, can impact the earnings of metal companies. A weaker rupee can boost export revenues, positively affecting the stocks on NSE.
Rebalancing of Nifty Metal Companies
The Nifty Metal Index undergoes a semi-annual re-balancing with cut-off dates on January 31 and July 31. For the review, average data for the preceding 6 months is considered. Changes are communicated to the market at least four weeks in advance, and adjustments made on January 31 take effect on March 31.
The NSE Metal Index is managed by the professional team at IISL (India Index Services and Products Limited), a group company of NSE. The governance structure includes the Board of Directors of IISL, the Index Advisory Committee (Equity), and the Index Maintenance Sub-Committee.
Eligibility Criteria for Nifty Metal Stocks List
To be part of the Nifty 500, companies must meet specific criteria. If a sector in the Nifty 500 has fewer than 10 eligible stocks, the shortfall will be filled by selecting from the top 800 stocks based on average daily turnover and average daily full market capitalization over the previous six months.
Companies aiming for inclusion should belong to the Metals sector, with a minimum trading frequency of 90% in the last six months and a listing history of at least six months. IPO-launched companies can qualify for index inclusion after meeting standard eligibility criteria for three months instead of six.
The ultimate selection is based on free-float market capitalization. The index calculates each stock’s weight using its free-float market capitalization, ensuring no single stock exceeds 33%. Additionally, the combined weight of the top three stocks cannot exceed 62% during rebalancing.
Features of the Nifty Metal Index
Embark on a journey into the dynamic realm of Nifty Metal, exploring its intriguing key features and components that make it so attractive:
Steel
Steel, the very backbone of infrastructure, has propelled nations into modernity. It has left an indelible mark on our cities, shaping them with the imposing structures of skyscrapers, sturdy bridges, and sprawling industrial complexes. In the spotlight of this index, the evolution, innovation, and global impact of leading steel companies come to life. Consequently, revealing a narrative of progress and influence.
Aluminium
In the vast landscape of industrial essentials, aluminium stands out for its lightweight nature and unparalleled versatility. This Index unfolds the story of growth and innovation among aluminum producers. These companies, showcased within its pages, pioneer sustainable solutions that extend across automotive, aerospace, packaging, and various other sectors. This, in turn, underscores the adaptability and importance of this metal.
Copper
At the forefront of renewable energy and electrification, copper takes center stage in this index. The narrative unfolds, showcasing the expansive growth of copper-based power production, transmission, and distribution industries. These companies play a pivotal role in steering us towards greener and more sustainable futures, highlighting copper’s crucial contribution to a world embracing cleaner energy solutions.
Zinc
In the often-overlooked domain, zinc emerges as a silent guardian against the ravages of corrosion. It brings attention to zinc mining and production firms that operate in the shadows, yet their impact is profound. These silent protectors ensure the longevity of global infrastructure, enabling progress to persist uninterrupted.
How Do You Calculate NIFTY Metal?
One can determine the Nifty Metal Index by assigning weights to its 15 stocks based on periodically capped free-float market capitalization compared to a base market capitalization value in real-time. The formula for calculating the index value is:
Index value = Current market capitalization/(Base market capitalization * Base Index Value)
This calculation is conducted on a semi-annual basis, considering data from the previous six months, with cutoff dates falling on January 31 and July 31 each year. Any potential replacements of stocks within the Nifty Metal Index are executed on the last trading day of March and September, following a four-week prior notice to the market.
What are the Benefits & Risks of Investing in Nifty Metal Stocks?
Here are some of the advantages and risks associated with investing in Nifty Metal Stocks NSE:
Advantages
- Potential for High Returns: The metal industry’s cyclical nature allows investors to capitalize on price fluctuations. As demonstrated by buying stocks when prices are low and selling when prices are high.
- Diversification: As the metal sector is less correlated with other industries like technology or healthcare, it offers a chance to balance risk exposure and diversify a portfolio
- Exposure to Global Growth: The metal industry operates on a global scale. By investing in the stocks in this index on NSE, investors can gain exposure to growth opportunities in other countries.
Risks
- Price Volatility: Metal prices can be highly volatile, experiencing significant fluctuations in short periods. Investors not prepared for such market volatility may face risks.
- Supply and Demand Shocks: Metal demand is influenced by factors like economic growth, infrastructure spending, and industrial activity. A drop in demand can lead to a decline in stock prices.
- Government Policies: Government actions and policies can greatly impact the metal industry. Restrictions on mining or increased production costs due to policy changes can adversely affect metal stocks.
Things One Should Remember for Metal Nifty Trading
When trading in stocks from this index, it’s essential to keep the following things in mind to gain profits in the Nifty metal future:
- Consider the Risks: Engaging in Nifty Metal Trading involves inherent risks, so it’s crucial to comprehend these risks thoroughly before commencing trading. This Index’s prices can exhibit volatility, posing a potential risk of capital loss.
- Conduct Thorough Research: Prior to initiating trades, conduct comprehensive research to grasp the factors impacting metal prices. This includes understanding global demand and supply dynamics, as well as government policies that can influence the industry.
- Use a Stop-Loss: Utilize a stop-loss order that automatically sells your shares from the index. Additionally, only if prices dip below a predetermined level. This measure can assist in limiting losses in case the market moves unfavourably.
- Don’t Over-Leverage: Leverage can magnify both profits and losses. Thus, it’s vital to apply leverage judiciously and trade with Nifty funds that you can afford to lose.
- Take Profits Wisely: While trading, seize the opportunity to secure profits when ahead. This strategy enables you to lock in gains and protect against potential losses should the market shift unfavorably.
How are Stocks Selected for Inclusion in NIFTY Metal?
To be considered as a stock which is a part of the NIFTY Metal Index, a security must:
- Be listed on the National Stock Exchange and part of NIFTY 500.
- Belong to the Metals sector.
- Demonstrate a trading frequency of at least 90% in the past six months.
- Have a listing history of a minimum of six months.
- Preferably trade on NSE’s F&O segment.
- For a recent IPO, eligibility criteria apply for three months instead of six.
- Adhere to a cap of 33% for a single stock and 62% for the top three stocks combined during rebalancing.
- If the number of eligible stocks falls below 10, the deficit will be selected from the top 800 ranked stocks based on turnover and market capitalization from the NIFTY 500 universe in the previous six months.
How to Invest in NIFTY Metal Index with smallcase?
The surge in infrastructure, construction, electricity demand, and automobile production is propelling the Indian metal sector’s expansion. The government, through initiatives like The Mines and Minerals Development & Regulation Act (MMDR) 2021 and the National Mineral Policy 2019, fosters the sector’s growth by streamlining mining, enhancing transparency, and promoting sustainability. The mining sector welcomes 100% FDI for metal and nonmetal ore exploration under the automatic route. This metal tracker smallcase includes aluminum, copper, manganese, iron & steel, and diversified companies, offering investors an efficient way to track and invest in the metals and mining sector. Looking for a convenient way to invest in the NIFTY Metal Index, view the smallcase below to find out more!
Disclosures
- Disclosures for Metal Tracker smallcase
To Wrap It Up…
To wrap it up, the Nifty Metal Index presents a promising opportunity for investors in the minerals industry. As a diversified index comprising leading metal companies, it reflects the growth potential and resilience of this sector. Consequently because it plays a crucial role in the Indian economy as it weighs nearly 3.52% on the Nifty 50 Index.
While we understand how exciting and confusing this opportunity may sound, we always look for hassle-free ways. That is why, you can simply invest in Metal Tracker smallcase where you can track and invest in the Metals and Mining sector and get upto 16.12% returns. Isn’t that great? Head over to the website to know more.
FAQs
Nifty Metal Index is rebalanced every 6 months, on January 31st and July 31st.
Having a demat account allows you to invest in specific stocks from the NIFTY Metal index NSE. However, as of now, there are no thematic funds or ETFs available that directly replicate the NIFTY Metal Index.
As of July 2023, the Nifty Metal index NSE has fallen by 15.3% in the last 12 months. The index reached a high of 24,402 on July 1, 2022, and has since fallen to 20,356. The decline in the index has been driven by a number of factors. This includes the global economic slowdown, rising interest rates, and the war in Ukraine.
The Nifty Metal Index on NSE offers investors exposure to the industry. In the last 5 years, it delivered total returns of 11.91%, showing 10.97% returns since inception.
To buy Nifty Metal shares, pick a reputable, registered brokerage. Ensure it’s trustworthy, and easily place your Nifty Market Share orders through them.
In the October-December quarter of FY23, prominent steel companies saw a drop in net profit, attributed to rising energy costs and a deceleration in demand.
All You Need to Know about NIFTY on smallcase –
smallcase provides you an array of articles related to NIFTY investments for various NIFTY indices as well as steps to invest in NIFTY for beginners, start your journey with just one click –
