Have you ever wondered how to gauge the economic pulse of India’s vibrant creative sectors?
The captivating storylines on your favorite streaming platforms to the immersive worlds of online gaming and the infectious beats of Bollywood music, these industries are not just sources of entertainment. They are indeed significant contributors to India’s growing economy.
Recognising this dynamism, the National Stock Exchange (NSE) has taken a significant step by launching the Nifty Waves Index.
This novel index, unveiled on Friday, May 2, 2025, is designed to track the performance of 43 listed companies that form the backbone of India’s burgeoning creative economy.
So, What’s So Special in This Index?
This isn’t just another index!
It is a barometer for an economic segment brimming with potential. The Nifty Waves Index encompasses companies spanning a diverse range of creative domains, including media, entertainment, gaming, film, television, digital platforms, and music.
The NSE aims to offer investors a clearer understanding of its growth trajectory and potential investment opportunities by providing a benchmark for this sector.
As NSE MD & CEO Ashishkumar Chauhan aptly stated, “This index will give investors an idea as to what’s happening to India’s creative economy.”
He further emphasised the index’s role in capturing the strong growth potential across digital and creative industries, highlighting their increasing importance as key pillars of India’s economic narrative.
Composition and Methodology
So, what exactly makes up this index?
The Nifty Waves Index comprises a carefully selected basket of 43 publicly listed companies operating within the aforementioned creative sectors. The weight assigned to each stock within the index is determined by its free-float market capitalisation, with a maximum cap of 5% to ensure diversification and prevent any single stock from unduly influencing the index’s performance.
As of its launch,
- the index is topped by Nazara Technologies, a prominent player in the gaming industry, holding the largest weightage at 5.23%.
- Following closely are Zee Media Corp. (5.15%), Zee Entertainment Enterprises (5.14%), and Hathway Cable & Datacom (5.07%).
- Other notable constituents include Den Networks, Tips Music, PVR Inox, Saregama India, TV Today Network, and Network18 Media & Investments.
This diverse mix of companies, ranging from established media houses to emerging digital platforms, paints a comprehensive picture of India’s creative landscape.
The index has a base date of April 1, 2005, with an initial value set at 1000. This historical baseline allows for the tracking of the sector’s growth over the past two decades and provides a foundation for future performance analysis.
To ensure the index remains relevant and accurately reflects the evolving creative economy, it will undergo semi-annual reconstitution and quarterly rebalancing. This periodic review process will allow for the inclusion of new players and the adjustment of stock weights based on their market performance.
Liquidity and Volatility
Given that some of the companies included in the Nifty Waves Index possess relatively smaller market capitalisations, questions regarding liquidity and potential volatility are natural.
Mr. Chauhan acknowledged this, stating that while some of these companies hold significant growth potential, others might not perform as strongly. He emphasised that the future trajectory of these companies remains to be seen. The possibility of new entrants in the creative space being considered for inclusion in the index over time further underscores the dynamic nature of this sector.
Thematic Indices being a Focused Approach to Investment
The Nifty Waves Index is the latest addition to the NSE’s suite of 35 thematic indices.
These indices are specifically designed to track the performance of companies operating within particular investment themes, offering investors a more focused approach to sector-specific opportunities. Other existing thematic indices cover areas such as capital markets, commodities, consumption, infrastructure, energy, and CPSEs (Central Public Sector Enterprises).
For investors seeking targeted exposure to the creative economy, the Nifty Waves Index presents a valuable tool. It allows for a more nuanced understanding of the sector’s performance compared to broad market indices. This focused approach can be particularly appealing for those interested in thematic mutual funds that aim to capitalize on specific long-term trends.
Thematic Mutual Funds and the Nifty Waves Advantage
The launch of the Nifty Waves Index can hold significant implications for the world of thematic mutual funds. These investment vehicles pool money from multiple investors to invest in companies that align with a particular theme or sector. With the introduction of a dedicated index for India’s creative economy, asset management companies now possess a benchmark against which they can design and evaluate thematic mutual funds focused on this space.
You can imagine a thematic mutual fund specifically curated to invest in the companies that constitute the Nifty Waves Index. Such a fund would offer investors a convenient way to participate in the growth of India’s media, entertainment, and digital sectors without the need for individual stock selection. The index provides a well-defined universe of companies, making it easier for fund managers to construct and manage portfolios aligned with this specific investment theme.
For investors, thematic mutual funds based on the Nifty Waves Index could offer several potential benefits. These include diversification across multiple players within the creative economy, professional fund management expertise, and the potential to capture the long-term growth trends within this dynamic sector. As India’s digital infrastructure continues to expand and its appetite for creative content grows, thematic mutual funds focused on this area could become increasingly attractive.
Wrapping Up
The launch of the Nifty Waves Index marks a significant milestone in the way India’s creative economy is understood and tracked. It provides a much-needed benchmark for a sector that has often been perceived as fragmented and difficult to measure from an investment perspective. The index offers a holistic view of the sector’s overall health and growth trajectory by bringing together the performance of key players across various creative domains.
This initiative has the potential to unlock new investment opportunities and attract greater attention to the economic contributions of India’s media, entertainment, and digital industries. As the index evolves and new players emerge within the creative landscape, it will be crucial to monitor its composition and performance closely. For investors seeking exposure to India’s dynamic growth story, particularly within the realm of digital innovation and cultural expression, the Nifty Waves Index and related thematic mutual funds could represent compelling avenues for participation. The ride on this digital wave has just begun, and the Nifty Waves Index is set to be our compass.
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