Nifty Commodities – Nifty Commodities Index

Nifty Commodities is a stock market index in India that tracks the performance of the top companies involved in the commodities sector, listed on the National Stock Exchange (NSE). It includes companies from industries such as mining, oil, gas, metals and agriculture, reflecting trends in the broader commodities market.

The table below shows the Nifty commodities index based on the highest market capitalisation and 1-year return.

Introduction To Nifty Commodities Stocks

Reliance Industries Ltd

The Market Cap of Reliance Industries Ltd is Rs. 1,985,700.07 crores. The stock’s monthly return is -3.38%. Its one-year return is 26.38%. The stock is 9.83% away from its 52-week high.

Reliance Industries Limited is a company based in India that is involved in various activities such as hydrocarbon exploration and production, petroleum refining, marketing, petrochemicals, advanced materials, composites, renewables (solar and hydrogen), retail and digital services. 

The company operates in segments including Oil to Chemicals (O2C), Oil and Gas, Retail and Digital Services. The O2C segment comprises refining, petrochemicals, fuel retailing, aviation fuel, bulk wholesale marketing, transportation fuels, polymers, polyesters and elastomers. Its assets in the O2C business include aromatics, gasification, multi-feed and gas crackers, downstream manufacturing facilities, logistics and supply-chain infrastructure. 

NTPC Ltd

The Market Cap of NTPC Ltd is Rs. 427,489.08 crores. The stock’s monthly return is 7.24%. Its one-year return is 80.49%. The stock is 3.01% away from its 52-week high.

NTPC Limited is an India-based company that specializes in power generation. The company’s main focus is on producing and selling large quantities of power to State Power Utilities. NTPC operates in two main segments: Generation and Others. 

The Generation segment is responsible for producing and selling power to state power utilities, while the Other segment provides services such as consultancy, project management, energy trading and more. NTPC owns and operates a total of 89 power stations in different Indian states, either on its own or through joint ventures and subsidiaries.  

Oil and Natural Gas Corporation Ltd

The Market Cap of Oil and Natural Gas Corporation Ltd is Rs. 367,917.10 crores. The stock’s monthly return is -10.65%. Its one-year return is 58.21%. The stock is 18.13% away from its 52-week high.

Oil and Natural Gas Corporation Limited is an Indian company that specializes in the exploration, production, refining and marketing of crude oil and natural gas. The company operates in various business segments including Exploration and Production, as well as Refining and Marketing. 

Its activities involve exploring, developing and producing crude oil, natural gas and related products within India, as well as acquiring oil and gas assets internationally for exploration, development and production. Additionally, the company is involved in downstream activities such as refining and marketing petroleum products, petrochemicals, power generation, LNG supply, pipeline transportation, SEZ development and helicopter services.  

UltraTech Cement Ltd

The Market Cap of UltraTech Cement Ltd is Rs. 341,736.79 crores. The stock’s monthly return is 3.46%. Its one-year return is 41.18%. The stock is 3.52% away from its 52-week high.

UltraTech Cement Limited is an Indian company that specializes in the production and sale of cement and associated products. Their product offerings include Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC), Composite Cement (CC) and Ready-Mix Concrete (RMC). 

Additionally, the company offers a variety of building products under brands such as UltraTech Cement, UltraTech Concrete, UltraTech Building Products, Birla White Cement and White Topping Concrete. The UltraTech Building Products line encompasses tile adhesives, repair materials, waterproofing solutions, industrial and precision grout, plasters, masonry products and lightweight autoclaved aerated concrete blocks.  

Coal India Ltd

The Market Cap of Coal India Ltd is Rs. 313,917.26 crores. The stock’s monthly return is -2.60%. Its one-year return is 72.10%. The stock is 8.20% away from its 52-week high.

Coal India Ltd., an Indian coal mining company, operates in 83 mining areas across eight states in India through its subsidiaries. The company oversees a total of 322 mines, comprising 138 underground, 171 opencast and 13 mixed mines, as well as various facilities like workshops and hospitals. Additionally, Coal India Ltd. has 21 training Institutes and 76 Vocational Training Centers. 

The company also runs the Indian Institute of Coal Management (IICM), a corporate training institute offering multi-disciplinary programs. 

Adani Green Energy Ltd

The Market Cap of Adani Green Energy Ltd is Rs. 298,582.20 crores. The stock’s monthly return is -3.58%. Its one-year return is 85.62%. The stock is 20.26% away from its 52-week high.

AGEL, an Indian holding company, is involved in renewable energy generation and related activities. It specializes in developing, constructing, owning, operating and maintaining large-scale solar power, wind power, hybrid projects and solar parks that are connected to the grid. 

The company operates in various markets within India, spanning approximately 91 locations in different states. AGEL’s power projects are primarily situated in Gujarat Punjab, Rajasthan, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Chhattisgarh, Madhya Pradesh and Uttar Pradesh. Its wind power plants are located in Madhya Pradesh and Gujarat.  

Indian Oil Corporation Ltd

The Market Cap of Indian Oil Corporation Ltd is Rs. 253,292.65 crores. The stock’s monthly return is 0.20%. Its one-year return is 90.37%. The stock is 14.87% away from its 52-week high.

Indian Oil Corporation Limited is an oil company based in India that operates in various segments including Petroleum Products, Petrochemicals and Other Business Activities. The Other Business Activities segment encompasses gas, oil and gas exploration, explosives and cryogenic business, as well as windmill and solar power generation. 

The company is involved in the entire hydrocarbon value chain, from refining and pipeline transportation to marketing, exploration, production of crude oil and gas, petrochemicals, gas marketing, alternative energy sources and global downstream operations. It has a wide network of fuel stations, storage terminals, depots, aviation fuel stations, LPG bottling plants and lube blending plants.  

Adani Power Ltd

The Market Cap of Adani Power Ltd is Rs. 251,935.25 crores. The stock’s monthly return is -2.10%. Its one-year return is 75.82%. The stock is 38.95% away from its 52-week high.

Adani Power Limited, a holding company, operates as a thermal power producer in India. It boasts a power generation capacity of about 12,450 megawatts (MW), including 12,410 MW from thermal power plants and a 40 MW solar power project. The company primarily emphasizes power generation services.

JSW Steel Ltd

The Market Cap of JSW Steel Ltd is Rs. 250,369.33 crores. The stock’s monthly return is 9.69%. Its one-year return is 34.90%. The stock is currently 2.01% away from its 52-week high.

JSW Steel Limited is a holding company based in India that focuses on the manufacturing and sale of iron and steel products. It operates integrated manufacturing facilities at Vijayanagar Works in Karnataka, Dolvi Works in Maharashtra and Salem Works in Tamil Nadu, as well as a plate and coil mill division in Anjar, Gujarat. 

The company produces a wide range of steel products, including hot rolled coils, cold rolled coils, galvanized and galvalume products, tinplate, electrical steel, TMT bars, wire rods, rails, grinding balls and special steel bars.  

Tata Steel Ltd

The Market Cap of Tata Steel Ltd is Rs. 208,873.41 crores. The stock’s monthly return is 9.26%. Its one-year return is 30.45%. The stock is 10.55% away from its 52-week high.

Tata Steel Limited is an Indian global steel company with an annual crude steel capacity of around 35 million tons. The company’s main focus is on manufacturing and distributing steel products worldwide. Tata Steel and its subsidiaries cover various aspects of the steel production process, starting from mining and refining iron ore and coal to the distribution of finished goods. 

Their product range includes various types of steel such as cold-rolled, BP sheets, Galvano, HR commercial, hot-rolled pickled and oiled and high tensile steel strapping, among others. The company’s branded products include MagiZinc, Ymagine, Ympress, Contiflo and several others.

What is the Nifty Commodities Index?

The Nifty Commodities Index is an important financial benchmark that tracks the performance of companies involved in the commodities sector. It includes a variety of industries, such as metals, agriculture and energy, reflecting their overall market conditions and trends.  

This index serves as a key indicator for investors interested in the commodities market. By analyzing the index’s movements, stakeholders can gain insights into sector performance, helping them make informed investment decisions based on the economic factors influencing commodity prices.

Nifty Commodities Weightage

The table below shows the nifty commodities weightage.

Nifty Commodities Index Based On 1M Return

The table below shows the nifty commodities index based on a 1-month return.

Nifty Commodities Stocks List Based On Dividend Yield

The table below shows the nifty commodities stocks list based on dividend yield.

How is the Nifty Commodities Index Value Calculated?

The Nifty Commodities Index Value is determined by calculating the weighted average of the prices of various commodities listed on the index. Each commodity’s weight reflects its market capitalization relative to the overall index, ensuring that larger commodities have a more significant impact on the index value.  

To compute the index value, the prices of the constituent commodities are aggregated and adjusted based on their respective weights. This method allows for a comprehensive representation of the commodities market, providing investors with insights into trends and movements in commodity prices.

How Stocks Are Selected for the Nifty Commodities Index?

The selection of stocks for the Nifty Commodities Index is based on various criteria including liquidity, market capitalization and compliance with regulatory standards. Only companies that meet these rigorous requirements are considered for inclusion, ensuring a robust and reliable index.  

Additionally, the index aims to represent the performance of the commodities sector effectively. A committee regularly reviews and updates the index to reflect changes in market conditions, ensuring that it remains relevant and accurately represents the sector’s dynamics.

History of Nifty Commodities

The Nifty Commodities Index was introduced by the National Stock Exchange (NSE) of India on July 1, 2005. It was created to track the performance of top companies in India involved in the commodities sector, including businesses in metals, mining, oil, gas, cement and agriculture. 

The index provides investors with a benchmark to gauge the overall performance of commodity-driven industries, which play a crucial role in the country’s economic growth. Over time, the Nifty Commodities Index has gained significance as India’s demand for resources and raw materials has grown, reflecting the dynamics of global commodity markets and domestic consumption.

Key Factors of Nifty Commodities Index Performance

The factor to consider when evaluating the Nifty Commodities Index performance is global commodity prices. Fluctuations in prices of oil, metals and other raw materials directly affect the revenues and profitability of companies in this index.

1. Global Demand and Supply: The performance of commodities is highly influenced by global demand and supply dynamics. Economic growth in key markets increases demand for raw materials, boosting the performance of companies in the Nifty Commodities Index.
2. Currency Exchange Rates: Commodities are often traded internationally and companies in the index are sensitive to currency fluctuations. A weakening rupee increases import costs, affecting profitability, while a strong rupee may hurt export revenues.
3. Government Policies and Regulations: Changes in government policies, such as export-import duties, environmental regulations, or subsidies, can impact the operational costs and revenue streams of commodity-based companies, thereby influencing their stock performance in the index.
4. Technological Advancements: Adoption of new technologies in mining, manufacturing, or agriculture can reduce operational costs and improve productivity. Companies that invest in innovation can boost their performance, positively impacting the overall index.
5. Geopolitical Risks: Commodities are sensitive to geopolitical events such as trade wars, sanctions, or conflicts that disrupt global supply chains. Such risks can cause price volatility, directly affecting the performance of companies in the index.

Benefits of Investing in the Nifty Commodities

The primary benefit of investing in the Nifty Commodities Index is gaining exposure to a diverse range of companies in India’s resource and commodity sectors, offering the potential for long-term growth driven by global demand and consumption.

1. Diversified Sector Exposure: The Nifty Commodities Index provides exposure to various industries like oil, gas, metals and agriculture. This diversification helps spread risk across multiple sectors, making it a stable option for investors in the commodity space.
2. Strong Demand Growth: As global demand for commodities like metals, energy and agricultural products grows, companies in the Nifty Commodities Index stand to benefit. This demand can lead to increased revenues and long-term stock appreciation.
3. Hedge Against Inflation: Commodities typically perform well during periods of inflation, as the prices of raw materials rise. Investing in the Nifty Commodities Index can act as a hedge against inflation, preserving value and offering potential returns.
4. Exposure to Global Markets: Many companies in the index have significant global operations. This provides investors with exposure to international markets and the potential for growth driven by global economic conditions and commodity demand.
5. Regular Dividend Income: Established commodity companies often provide dividends to shareholders. Investors can benefit from a steady income stream in addition to potential capital appreciation, making the index attractive for both income and growth-focused investors.

Risks of Investing in the Nifty Commodities Index

The main risk of investing in the Nifty Commodities Index is its sensitivity to commodity price fluctuations. Changes in global supply-demand dynamics for raw materials like oil, metals and agricultural products can significantly impact company revenues.

1. Global Price Volatility: Commodity prices are subject to global market forces and can be highly volatile. Sudden price drops in oil, metals, or agricultural products can lead to reduced profitability for companies, affecting stock performance in the index.
2. Geopolitical Risks: Geopolitical tensions, trade wars, or sanctions can disrupt commodity supply chains, impacting the availability of raw materials. Such disruptions increase operational costs and can negatively affect the overall performance of the index.
3. Regulatory and Environmental Risks: Changes in government policies, environmental regulations, or export-import duties can increase costs for commodity companies. Stricter regulations on mining, energy, or agriculture may reduce profitability and hurt stock prices.
4. Currency Exchange Rate Fluctuations: As many commodity companies engage in global trade, they are exposed to currency risks. A stronger rupee can reduce export competitiveness, while a weaker rupee increases import costs, both impacting company earnings.
5. Technological Disruptions: Technological advancements, particularly in renewable energy or alternative materials, can reduce the demand for traditional commodities like oil or metals. Companies that fail to adapt may face long-term declines in performance.

How To Invest in Nifty Commodities Stocks?

Investing in Nifty commodities stocks involves understanding market trends and selecting the right stocks. Start by researching the Nifty commodities index to identify strong performers. Consider utilizing platforms like Alice Blue for trading, as they offer various tools and resources to facilitate your investments. It’s essential to perform a thorough analysis and stay updated on market news. 

What Are The Tax Implications Of Investing In Nifty Commodities Index?

Investing in the Nifty Commodities Index can have various tax implications. Generally, gains from such investments can be classified as capital gains and the applicable tax rates depend on whether the gains are long-term or short-term.   Long-term capital gains from equity investments are typically tax-exempt up to a certain limit, while short-term gains are taxed at a higher rate. Investors need to understand these tax classifications and plan their investments accordingly to maximize returns. Proper tax planning can enhance profit potential while ensuring compliance with tax regulations.

Future of Nifty Commodities

The future of Nifty Commodities holds significant importance for investors and traders in the financial market. It encompasses a wide range of commodities, enabling participants to gain insights and make informed decisions based on market trends and economic indicators.  

As various factors influence commodity prices, including supply and demand dynamics, geopolitical events and weather conditions, participants must stay vigilant. Nifty Commodities provides a platform for hedging risks and capitalizing on opportunities, allowing stakeholders to navigate a complex and ever-evolving market landscape effectively.

FAQs – Nifty Commodities Index

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Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.