The Nifty India Defence Index was launched on 19 January 2022 and consists of 16 Stocks from Capital Goods and Chemical Industry. The Index aims to track the growth and performance of companies that broadly represent the Indian defence sector.
As we all know, the Indian government is heavily focused on establishing in-house defence infrastructure in order to reduce defense imports and dependency on other countries for cutting-edge defence equipment and technologies. Hence, Investment in the Nifty Defence Index can be a very lucrative option for long term. We will go through the Stocks List, their weightage, Financials and How to Invest in the Nifty India Defence Index. Let’s get started 🚀
| Nifty Defence Index Portfolio Description | |
|---|---|
|
Methodology |
|
|
No. of Stocks |
16 |
|
Launch Date |
19th January 2022 |
|
Base Date |
2nd April, 2018 |
|
Calculation Frequency |
End of Day |
|
Index Rebalancing |
Semi Anually |
Top 10 Stocks/Constituents of Nifty India Defence Index
| Company Name | Industry | Weightage(%) | |
|---|---|---|---|
|
Bharat Electronics Ltd. |
Capital Goods |
20.22% |
|
|
Hindustan Aeronautics Ltd. |
Capital Goods |
18.23% |
|
|
Solar Industries India Ltd. |
Chemicals |
15.79% |
|
|
Cochin Shipyard Ltd. |
Capital Goods |
8.07% |
|
|
Mazagoan Dock Shipbuilders Ltd. |
Capital Goods |
7.73% |
|
|
Bharat Dynamics Ltd. |
Capital Goods |
7.19% |
|
|
Data Patterns (India) Ltd. |
Capital Goods |
5.11% |
|
|
Astra Microwave Products Ltd. |
Capital Goods |
4.61% |
|
|
Zen Technologies Ltd. |
Capital Goods |
3.78% |
|
|
Garden Reach Shipbuilders & Engineers Ltd. |
Capital Goods |
3.25% |
|
Why to Invest in Nifty India Defence Index ?
- Government Budget Allocation: In FY 24-25, the budget allocation for Defence Research & Development Organization(DRDO) was 6.2 Lakh Crores which is nearly 3 times what it was in FY14-15(2.29 Lakh Crores).
- Defence Investing: India ranked up from being the 9th Larget spender of Defence in 2000 to the 3rd Largest spender of Defence in 2022.
- Rise in Defence Exports: India’s Defence exports grew by 334% in the last 5 years and changes in government policies aim to reduce imports by around 70%.
- Diversified Portfolio: The Nifty Defence Index Portfolio is well diversified across all market caps. Small Cap(37.5%), Mid Cap(20.1%), Large Cap(42.4%).
- 5-year Index CAGR of more than 58%.
👉 Also Check out the Nifty EV & New Age Automotive Index which was recently launched in May 2024 and aims to track the performance of companies that are active in electric vehicles or new-age automotive vehicles. Â
Nifty India Defence Index Financials
Fundamentals
- Price to Earning(P/E) Ratio : 56.87
- Price to Book(P/B) Ratio: 16.27
- Dividend Yield: 0.45
Nifty Defence Index Returns
| 1 Year | 3 Year | 5 Year | Since Inception |
|---|---|---|---|
|
116.91% |
84.36% |
60.46% |
37.15% |
How to Invest in Nifty India Defence Index?
You can Invest in the Nifty Defence Index via ETFs(exchange-traded funds) or Mutual Funds. As of September 2024 Motilal Oswal and HDFC provide this opportunity and Groww is also going to launch Nifty Defence ETF on 11th October 2024.
Motilal Oswal Nifty India Defence Index Fund
Motilal Oswal Nifty India Defence Index Fund was Introduced in June 2024 and it is an open-ended fund replicating/tracking the Nifty India Defence Index.
| P/E Ratio | P/B Ratio | Expense Ratio | Founded Year |
|---|---|---|---|
|
49.12 |
12.41 |
0.31% |
2024 |
This Fund has the lowest Expense Ratio as of now for all Defence Funds and ETFs available in the market. Hence, this fund can be considered as a good option to start investing in Nifty Defence Index. You can start a Systematic Investment Plan(SIP) or do a Lumpsum in this fund from their Official Website or any Broker app of your choice.
Motilal Oswal Nifty India Defence ETF
ETFs (Exchange Traded Funds) are just like common stocks and can be traded (buy/sell) on an exchange just like any other stock. ETFs are best suited for the case when you don’t want to do monthly SIP and want to have the flexibility to buy or sell whenever needed.
Motilal Oswal Nifty India Defence Index ETF replicates the Nifty Defence Index and can be bought from any broker application of your wish just like a common stock.
| P/E Ratio | P/B Ratio | Expense Ratio | Founded Year | ETF Symbol |
|---|---|---|---|---|
|
57.24 |
11.71 |
0.40% |
2024 |
MODEFENCE |
HDFC Defence Fund
HDFC Defence Fund is an open-ended fund which invests in companies from the Defence Domain. It is not a replica of the Nifty Defence Index and has a portfolio of 20 companies as of September 2024. This Fund Started in June 2023 and has generated an extraordinary 82.57% CAGR since inception. However, the expense Ratio of this Fund is a bit on the higher side(0.73%)Â
| P/E Ratio | P/B Ratio | Expense Ratio | Founded Year |
|---|---|---|---|
|
55.22 |
8.80 |
0.73% |
2023 |
Apart from these Investment Options Groww is also bringing the Nifty Defence Index ETF which is under NFO(New Fund Offer as of now) and will be available from 11th October 2024 to trade on exchange. It consists of only 10 Stocks out of Index constituents. Check the details of GROWW Nifty India Defence ETF.
What is Nifty Defence Index?
Nifty India Defence Index was Launched in January 2022 and consists of 16 stocks. This Index aims to track the growth and performance of companies involved in defence items & technology development.Â
What is the Return of Nifty Defence Index?
The Nifty Defence Index has generated an extraordinary return of 116% in the last year, 84.36% CAGR for the last 3 years, 60.46% CAGR in the last 5 years, and 37.15% CAGR since Inception.
How to Invest in Nifty defence Index?
You can Invest via ETFs and Mutual funds in the Nifty Defence Index Fund. A few popular Funds and ETFs to invest in this Index are as below:
Should we Invest in Nifty India Defence Index?
Yes, you can consider the below points to decide whether you should invest in this index or not.
- India’s Defence exports grew by 334% in the last 5 years and changes in government policies aim to reduce imports by around 70%.
- India ranked up from being the 9th Larget spender of Defence in 2000 to the 3rd Largest spender of Defence in 2022.
- In FY 24-25, the budget allocation for Defence Research & Development Organization(DRDO) was 6.2 Lakh Crores which is nearly 3 times what it was in FY14-15(2.29 Lakh Crores).
- 5-year Index CAGR of more than 58%.
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