NCDEX Ltd, formerly the National Commodities and Derivatives Exchange, has entered the equity and equity derivatives markets with the launch of two rule-based indices, NDEX and FINNDEX, the exchange said on Thursday.
It described the move as a step towards becoming a multi-segment exchange.
NDEX is a benchmark of 20 large and liquid Indian stocks, picked from the top 60 companies listed on the NSE. FINNDEX covers 15 financial sector stocks, excluding insurance companies, chosen from the top 40 eligible names.
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Both indices use a multi-factor method instead of relying on market capitalisation alone. Each stock gets a composite score made up of free-float market capitalisation (30%), average daily traded value (30%), beta (20%) and volatility (20%).
The exchange said this brings together company size, trading activity and a stock's sensitivity to the market. Final weights are an equal mix of free-float market-cap weights and composite-score weights.
No single stock can exceed 15% at any rebalancing, which the exchange said improves diversification and limits concentration risk.
The indices are owned by NCDEX and calculated and maintained by NSE Indices Ltd. They will be reviewed and rebalanced twice a year, in March and September, with provision for ad-hoc reconstitution in specified circumstances.
Both use January 2010 as the base month and 10,000 as the base value. Values will be calculated in real time during market hours and published through NCDEX's data feeds, website and periodic factsheets.
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NCDEX said NDEX and FINNDEX together offer a representative measure of the capital markets and the financial sector respectively.
Vikas Goel, managing director and chief executive of NCDEX, said: "The roll out of NDEX and FINNDEX is an important milestone in NCDEX's transition into a multi-segment exchange.
Our expansion into the equity and equity derivatives segment is a part of our vision to build a broader market institution that responds to the changing needs of India's financial ecosystem."
He added that as Indian capital markets deepen and draw more domestic and international participation, "transparent, well-designed benchmarks become crucial".
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Tojo Banerjee, chief of equity business at NCDEX, said the indices look "beyond market capitalisation" to offer a more nuanced view of India's equity landscape.
He said FINNDEX reflects the growing diversity of the financial sector, which extends beyond traditional banking to capital markets, NBFCs and fintech, while NDEX serves as a benchmark for large and liquid equities.
"We believe these indices can serve as useful reference points for investors, market participants and researchers in assessing India's evolving growth story," he said.
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