NSE Indices launches Nifty 500 Value 50 index to track performance of select firms

New Delhi: An NSE group company Wednesday announced the launch of a new index, Nifty 500 Value 50, which will track the performance of select 'value' companies based on price multiples and dividend yield.

The index consists of 50 companies from its parent Nifty 500 index, selected based on their 'value' scores, NSE Indices Ltd, an NSE group company, said in a statement.

The value score of each company is determined based on earnings to price ratio, book value to price ratio, sales to price ratio and dividend yield.

The weight of each stock in the index is based on a combination of stock's value score and its free float market capitalisation.

"The concept of 'value investing', which is an art of buying stocks trading at lower prices in comparison to their intrinsic values, has been in existence for decades. Nifty 500 Value 50, a smart beta index, captures performance of 50 such 'value' companies across size segments and sectors.

"The stocks are identified using a unique rule-based stock-selection methodology based on price multiples and dividend yield – a methodology which is backed by robust theses and extensive back-testing," NSE Indices CEO Mukesh Agarwal said.