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MOSL: INDIA STRATEGY: Nifty at all-time high; a trip down the memory lane

India Strategy: Nifty at all-time high; a trip down the memory lane; Insightful reading on the Nifty’s journey since the new millennium

 

• The Nifty celebrates a new milestone today - a blissful 11,500. This achievement seemed unimaginable in 2002, when the index hovered around the edge of 1K. As mighty as the Nifty seems now, we note that it has been a journey down numerous highways and byways. We, thus, thought it would be interesting to look back and share some exciting aspects of this voyage.
• Change is the only constant and index structure is no exception. Over the years, the representation in Nifty-50 has undergone a sea change in consonance with the changes in the underlying economy - new sectors have evolved, while some have lost relative importance in the New India.

 A flashback – 2002 to 2018

• Since its base period (November 1995), the Nifty has delivered a CAGR of 11%. However, its total market cap is up 56x, implying a 19% CAGR.
• Notably, since December 2002, total market cap is up 24x, implying a 23% CAGR. However, the Nifty has delivered a CAGR of 16%.
• From the Nifty constituents of 2002, M&M is the best performing stock with a CAGR of 31%, while MTNL is the only stock to deliver negative returns.
• Only 38% (19 stocks) of the Nifty constituents have consistently remained on the index since December 2002. Combined weight of these 19 stocks has declined to 61.4% from 73.1% around 16 years ago.
• Notably, 13 stocks that got listed over the period - Maruti (listed in July 2003), TCS (August 2004),UltraTech (August 2004), NTPC (November 2004), Yes Bank (July 2005), TechM (August 2006), Power Grid (October 2007), Adani Ports (November 2007), Bajaj Auto (May 2008), Bajaj Finserv (May 2008), Coal India (November 2010), Bharti Infra (December 2012) and Indiabulls Housing (July 2013) - are part of the index now.