NCDEX Enters Equity Market with Launch of NDEX and FINNDEX Indices

NCDEX has launched two rule-based equity indices, NDEX and FINNDEX, marking its strategic entry into the equity and equity derivatives markets. The indices are calculated and maintained by NSE Indices Ltd and will be rebalanced semi-annually.

NEW DELHI — The National Commodities and Derivatives Exchange (NCDEX) has announced its entry into the equity and equity derivatives markets with the launch of two rule-based equity indices: NDEX and FINNDEX.

According to the exchange, the new indices utilize a multi-factor approach for stock selection and weighting. This methodology combines free-float market capitalization at 30 per cent, average daily traded value at 30 per cent, beta at 20 per cent, and volatility at 20 per cent.

The NDEX comprises 20 large, liquid Indian equities chosen from the top 60 National Stock Exchange (NSE)-listed companies. Meanwhile, the FINNDEX is designed to track 15 financial-sector stocks selected from the top 40 eligible companies, specifically excluding insurance firms.

While the indices are owned by NCDEX Ltd, their calculation and maintenance will be handled by NSE Indices Ltd. The indices will undergo review and rebalancing twice a year, scheduled for March and September, with an individual stock weight cap of 15 per cent.

Both indices share a base month of January 2010 with a base value of 10,000. Index values will be disseminated in real time throughout market hours.

Commenting on the launch, Vikas Goel, MD and CEO at NCDEX, stated that the indices aim to contribute to the development of market infrastructure supporting informed investment decisions. He added that the move will strengthen the range of tools available to market participants and reinforce India's position as a destination for global capital.

"NCDEX's expansion from commodities into the equity and equity derivatives segments represents a notable strategic development in India's financial markets. By introducing structured, multi-factor indices like NDEX and FINNDEX in collaboration with NSE Indices Ltd, the exchange is broadening the analytical and investment tools available to market participants. This move highlights the ongoing evolution of market infrastructure and offers institutional and retail investors additional benchmarks for portfolio evaluation and risk management." — Dr. Shishir Gupta, Founder & CEO, StartupLanes