Nifty India Defence Index: 5 things to know

1.The Nifty India Defence Index tracks the performance of the Indian defence sector.
2.Stocks can be a part of the index if they are from the eligible industries as defined by AMFI, or with at least 10% of the revenue from the defence industry.
3.The weight of a single stock in the index is capped at 20% to maintain diversification and avoid over-concentration.
4.To ensure a wide range of companies, the index should have a minimum of 10 stocks.
5.The index forms the benchmark index for active and passive defence mutual funds.

Content courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.