The National Stock Exchange has launched the Nifty India Defence Equal Weight Index, marking a significant development in India's defence sector investment products. According to reports from Business Standard, the index comprises 19 stocks that are all constituents of the parent Nifty India Defence Index, with each constituent receiving an equal weight allocation. The parent index includes companies from the Nifty Total Market Index that either belong to eligible defence-related industries or derive at least 10% of their revenue from the defence sector.
The Motilal Oswal Nifty India Defence Index Fund Direct Growth has emerged as a popular investment option, with ₹5182 crore worth of assets under management (AUM) as of July 2026. The fund has delivered impressive performance with a CAGR return of 11.97% since inception and 23.46% CAGR return over the last 1 year. With a minimum investment of ₹500 for both lump sum and SIP, the fund offers flexible investment options with no lock-in period and an expense ratio of 0.5%. The fund's top holdings include Hindustan Aeronautics Ltd, Bharat Electronics Ltd, Bharat Forge Ltd, Solar Industries India Ltd, and Mazagon Dock Shipbuilders Ltd.
The new index follows an equal-weighted methodology with a base date of April 2, 2018 and a base value of 1,000. As reported by Business Standard, it will be reconstituted on a semi-annual basis, while constituent weights will be rebalanced quarterly in March, June, September and December. The benchmark is expected to serve as a reference index for passive investment products such as exchange-traded funds (ETFs), index funds and structured products, while also providing asset managers with a dedicated benchmark for India's defence sector. This equal-weight structure offers a differentiated option for products seeking to reduce reliance on one or a few large stocks, further expanding the range and breadth of sector-specific products in India's thematic index segment.
According to the index factsheet reported by Business Standard, capital goods account for 88.98% of the index weight, followed by chemicals at 5.56% and automobile & auto components at 5.46%. The top constituents include Astra Microwave Products (5.80%), Hindustan Aeronautics (5.76%), Paras Defence and Space Technologies (5.72%), Dynamatic Technologies (5.60%) and Solar Industries India (5.56%). The index has delivered impressive performance with an annualised total return of 31.05% since inception on April 2, 2018, while its one-year and five-year annualised total returns stand at 32.71% and 55.09% respectively. This performance reflects the growing investor interest in the defence sector and the index's ability to provide sector-specific diversification options for passive investment products.
