Nifty Pharma

As on 16 Jul 2024 02:44 PM

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Nifty Pharma Sector Performance

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Nifty Pharma

The pharma industry’s performance is depicted in the Nifty Pharma Index. 20 NSE-listed companies are included in the Index (NSE). 

The level of the Nifty Pharma Index shows the overall free float market valuation of all the companies included in the benchmark with a specific base market cap value. This index is calculated by using the free float market capitalization approach. 

The Nifty Pharma Index is utilized for several things, including creating structured products, ETFs, and index funds, as well as benchmarking investment portfolios. 

The index was introduced in July 2005, with a reference level of 1000 and a baseline date of January 1st, 2001. The index is recalibrated every two years.

Nifty Pharma Scrip Selection Criteria

  • The companies under evaluation must be Nifty 500 members. 
  • A shortfall amount of stocks will be chosen from the world of securities classified within the leading 800, predicated both on total daily turnover and daily total full market capitalization.
  • Businesses must be engaged with the pharmaceutical industry.
  • The company’s investing velocity in the previous six months must have been at least 90%.
  • The company must have a six-month listing record. If a firm launches an IPO and meets the standard qualifying conditions for the index for a 3-month term rather than a period of 6 months, it will become qualified for inclusion within the index.
  • Depending on the companies’ free-float market capitalization, the final 20 companies will be chosen.
  • When making the final decision, priority will be given to firms that can be traded in the futures and options part of the NSE.

Other Indices


Which are currently the best pharma companies in India?

Cipla, Alkem, Sun Pharma, Torrent Pharma, and Dr. Reddy’s Laboratories are the current best pharma-based companies in India in terms of market capitalization. 

How do I calculate Nifty Pharma?

Each stock’s weightage in the index is determined according to its free-float market capitalization, except for the top three stocks, whose combined weight cannot exceed 62% at the point of rebalancing (Index Rebalancing: The index is recalibrated every two years), and no separate stock should have a weightage greater than 33%.

How many companies are present in the Nifty 50 index?

The Nifty 50 Index comprises a total of 4 businesses from the Nifty Pharma Index. These companies are Dr. Reddy’s Laboratories Ltd., Cipla Ltd., Divi’s Laboratories Ltd. and Sun Pharmaceuticals Ltd.

Is it risky to invest in pharma stocks?

Buying stocks of pharmaceutical companies can sometimes be risky due to the high costs and lengthy time between pharmaceutical research and approval (considering that the drug research procedure is successful and regulatory permission is given).

Should I start investing in pharmaceutical stocks?

Despite the instability, pharma businesses might be appealing to long-term traders. Traders can earn higher returns when they purchase at the correct time because the pharmaceutical industry is growing rapidly and has become increasingly important to daily life.

What is the cause behind the impulsive growth of the pharma sector?

Several pharma companies have experienced a spike in revenue due to authorities in the USA and other nations approving immunizations against the COVID-19 virus. The need for pharmaceutical stocks is rising; therefore, now is an excellent time to buy them.

What are the few major uses of Nifty Pharma?

There are several uses of Nifty Pharma in real-time. Still, the few major ones include the creation and implementation of structured products, index funds, ETFs, and benchmarking or evaluating mutual funds portfolios. 

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