Nippon India Nifty India Manufacturing ETF & Index Fund – Powering Growth in India’s Manufacturing Story

India’s manufacturing sector has emerged as a strong pillar of the economy, contributing significantly to GDP, exports, and employment. With government initiatives, a young skilled workforce, and increasing foreign investments, the sector is poised for robust growth. To capitalize on this opportunity, Nippon India Mutual Fund has launched two innovative offerings – Nippon India Nifty India Manufacturing ETF and Nippon India Nifty India Manufacturing Index Fund – both designed to give investors access to India’s manufacturing growth story.

The New Fund Offer (NFO) for both schemes opens on August 6, 2025 and closes on August 20, 2025.

1. India’s Manufacturing Journey – From License Raj to Global Competitiveness

The manufacturing landscape in India has undergone major transformations over the decades:

• 1951 – 1990 (License Raj): Heavy regulation, licenses mandatory for new factories.

• 1991 – Liberalisation: Deregulation, privatization, and foreign investment opened doors for manufacturing growth.

• 2014 – Make in India: Focus on 15 manufacturing sectors to make India a global hub.

• 2020 – Production Linked Incentive (PLI): ₹1.97 lakh crore outlay to boost 14 key sectors and promote global competitiveness.

2. Strong Growth Drivers for Manufacturing in India

India’s manufacturing growth is powered by multiple tailwinds:

• Robust Economy: Manufacturing contributes ~17% to GDP.

• Demographic Advantage: Median age of 28.2 years and a large working-age population.

• Competitive Costs: Low minimum wages and attractive corporate tax rates encourage global companies to set up manufacturing units.

• Policy Support: Make in India, PLI schemes, PM GatiShakti, semiconductor development, and tax reforms.

• Rising FDI: $165.1 billion in manufacturing FDI over the last decade, a 69% increase from the previous decade.

3. Nifty India Manufacturing Index – Capturing the Sector’s Potential

The Nifty India Manufacturing Index is designed to represent companies from key manufacturing-related industries in India.

• Selection: Stocks from Nifty 100, Nifty Midcap 150, and Nifty Smallcap 50 in manufacturing industries.

• Weighting: Free-float market cap-based, with maximum stock weight at 5%.

• Sector Spread: Diversified across 10 sectors including Automobiles, Capital Goods, Healthcare, Metals, Chemicals, and Consumer Durables.

• Top Companies: Includes leaders like Sun Pharma, Mahindra & Mahindra, Reliance Industries, Maruti Suzuki, Tata Motors, and Bharat Electronics.

Since inception (April 2005 – July 2025), the index has delivered a CAGR of 15.4%.

4. About the Nippon India Nifty India Manufacturing ETF

• Type: Open-ended ETF tracking the Nifty India Manufacturing Index.

• Objective: Provide returns in line with the index before expenses.

• Investment: 95–100% in index securities, up to 5% in money market instruments.

• Key Benefits:

  • Diversification in manufacturing companies.

  • Rules-based and transparent structure.

  • Low cost compared to active funds.

  • Can be traded on the stock exchange like shares.

5. About the Nippon India Nifty India Manufacturing Index Fund

• Type: Open-ended index fund tracking the same index.

• Objective: Same as ETF – returns in line with the index before expenses.

• Investment: 95–100% in index securities, up to 5% in money market instruments.

• Key Benefits:

  • Suitable for SIP investments.

  • Reduced non-systematic risk.

  • Low expense ratio.

  • Easy access without requiring a demat account.

6. Why Consider These Funds?

Investing in these schemes offers:

• Exposure to India’s manufacturing growth through a diversified portfolio.

• Low-cost investing in a promising sector.

• Transparent and rules-based approach to stock selection.

• Options to invest via ETF or Index Fund depending on preference.

NFO Details (Both Schemes)

• Opens: August 6, 2025

• Closes: August 20, 2025

• Benchmark: Nifty India Manufacturing TRI

• Minimum Investment: ₹1,000 (and in multiples of Re.1 thereafter)

💡 Final Word:
With India set to become a global manufacturing hub, the Nippon India Nifty India Manufacturing ETF & Index Fund offers investors an opportunity to participate in the sector’s long-term growth. Whether you prefer the flexibility of an ETF or the convenience of an index fund, both options provide a cost-effective and diversified route to gain from India’s manufacturing momentum.

Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.

"Ready to invest in India’s manufacturing future? Contact us now to know how Nippon India’s NFO can fit into your portfolio."