Nifty Shariah 25
The Nifty Shariah 25 indices are designed to offer investors shariah compliant investment solutions. NSE Indices Limited calculates three shariah indices Nifty50 Shariah, Nifty500 Shariah & Nifty Shariah 25.
Nifty Shariah 25 comprises of 25 Shariah compliant companies listed on National Stock Exchange of India. The constituent weights are capped at 10%.
Nifty Shariah 25 Index can be used for a variety of purposes such as benchmarking fund portfolios, launching of index funds, ETFs and structured products.
Nifty Shariah 25 Methodolgy
i. The company's trading frequency should be at least 90% in the last six months
ii. The company should be shariah compliant for last 24 months continuously
iii. Companies which are IRDA dividend norms compliant shall be considered eligible to be included in the index.
iv. 25 stocks based on six month average free float market capitalization are selected as index base composition
v. Shariah compliance screening is done on monthly basis & periodic index review is carried out on semi-annual basis
vi. During monthly review, if any index constituent becomes non-shariah compliant then, shariah compliant non-index constituent from replacement pool will be included in the index
vii. During semi-annual review, if any non-index shariah compliant security with 1.5 times the free float market capitalization is available in replacement pool than last index constituent by free float market capitalization, then replacement shall be made
Monthly shariah compliance screening is carried out by shariah screening partner of NSE Indices Limited. Index changes are typically implemented from the first working day after F&O expiry of respective month.
A professional team manages all NSE indices. There is a three-tier governance structure comprising the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity) and the Index Maintenance Sub-Committee.