Method of Computation

CNX Nifty Junior is computed using free float market capitalisation weighted method, wherein the level of the index reflects the total market value of all the stocks in the index relative to a particular base period. The method also takes into account constituent changes in the index and importantly corporate actions such as stock splits, rights, new issue of shares etc without affecting the index value.

From May 04, 2009 CNX Nifty Junior is computed using Free Float Market Capitalisation weighted method, wherein the level of index reflects the free float market capitalisation of all stocks in Index.

Base Date and Value

CNX Nifty Junior was introduced on January 1, 1997, with base date and base value being November 03, 1996 and 1000 respectively and a base capital of 0.43 trillion.

Criteria for Selection of Constituent Stocks

The constituents and the criteria for the selection judge the effectiveness of the index. Selection of the index set is based on the following criteria:

• Liquidity (Impact Cost)

  For inclusion in the index, the security should have traded at an average impact cost of 0.5% or less during the last 6 months for 90% of the observations for a basket size of 50 Lakhs.

• Floating Stock

  Companies eligible for inclusion in the CNX Nifty Junior should have atleast 10% floating stock. For this purpose, floating stock shall mean stocks which are not held by the promoters and associated entities (where identifiable) of such companies.

• Others

  A company which comes out with a IPO will be eligible for inclusion in the index, if it fulfills the normal eligiblity criteria for the index like impact cost, free float market capitalisation and floating stock, for a 3 month period instead of a 6 month period.
  Replacement of Stock from the Index:

  A stock may be replaced from an index for the following reasons:

  • Compulsory changes like corporate actions, delisting etc. In such a scenario, the stock having largest free float market capitalization and satisfying other requirements related to liquidity, turnover and free float will be considered for inclusion.
  • When a better candidate is available in the replacement pool, which can replace the index stock i.e. the stock with the highest free float market capitalization in the replacement pool has at least twice the free float market capitalization of the index stock with the lowest free float market capitalization. However where a stock is replaced due to a stock being transferred to CNX Nifty then the stock coming into CNX Nifty Junior need not have twice the free float market capitalization of the stock which is being transferred to CNX Nifty.

With respect to (ii) above, a maximum of 10% of the index size (number of stocks in the index) may be changed in a calendar year. Changes carried out for (ii) above are irrespective of changes, if any, carried out for (i) above.

Index Maintenance plays a crucial role in ensuring stability of the Index as well as in meeting its objective of being a consistent benchmark of the equity markets.

IISL has constituted an Index Policy Committee, which is involved in policy and guidelines for managing the CNX Indices. The Index Maintenance Sub-committee takes all decisions on addition/ deletion of companies in any Index.

The index is reviewed every six months (on half-yearly basis) and a six weeks’ notice is given to the market before making changes to the index set.

Download Details of past changes to CNX NIFTY Junior Constituents (.xls)