Newly Launched Nifty India Tourism Index: Explained

Great news for all stock market enthusiasts looking to invest in the travel and tourism sector — the NSE has unveiled a new thematic index focusing on the industry, the Nifty India Tourism Index. Let’s take a deep dive into the details of this index and understand its functioning.

What’s Happening?

On June 18, 2024, NSE’s index services subsidiary, NSE Indices Limited, launched the Nifty India Tourism Index. This is significant as the Indian government is striving to position India as a leading destination for international tourism.

The Nifty India Tourism Index is designed to monitor the performance of 30 stocks. However, in the first phase, only 17 stocks have been included, with the remaining to be added in the future.

What Is the Nifty India Tourism Index?

This new thematic index allows investors to track the performance of travel and tourism-related stocks in the Nifty 500. The index’s base date is April 1, 2005, and its base value is 1000.

The index will be reconstituted semi-annually and rebalanced on a quarterly basis. The consumer services sector holds the largest share of the index at 66.98%, followed by the services sector at 29.73%, with the remaining 3.29% attributed to consumer durables.

As mentioned in the press release, Mukesh Agarwal, CEO of NSE Indices, says, “The Nifty India Tourism Index aligns with NSE’s vision to provide innovative indices in line with market trends. The launch of the Nifty Tourism index will facilitate creation of products which will create opportunity for asset managers to invest in the tourism industry, thereby providing valuable tools for investors aiming to capitalise on the growth and resilience of this vibrant industry”.

What’s in it for Investors?

The Indian travel and tourism industry is one of the largest, valued at USD 199.6 billion. With a rise in disposable income and robust economic growth, the market has witnessed a massive boom in recent times, and this trend is expected to continue in the coming years.

The Nifty India Tourism Index has the potential to create a range of investment products targeting the tourism sector, offering valuable insights to investors on how to capitalise on the growth.

What’s Next?

The launch of the Nifty India Tourism Index is a watershed moment for the Indian travel and tourism industry. It will usher in an era of significant capital investment and provide a much-needed boost to new-age startups focusing on the industry. Furthermore, fund managers can use the tourism index as a benchmark for their strategies related to ETFs, index funds, and other structured products focused on the sector.

The companies mentioned in the article are for information purposes only. This is not an investment advice. Disclaimer: Teji Mandi Disclaimer