India’s National Commodity & Derivatives Exchange (NCDEX) is expanding its presence in the financial markets with the launch of two new benchmark indices, NDEX and FINNDEX. The move marks an important step in the exchange’s plans to diversify beyond agricultural commodities and develop into a multi-segment market infrastructure provider.
Announced on Thursday, October 22, 2026, the two indices will track selected Indian stocks across the broader equity market and financial services sector. The launch comes as NCDEX prepares to expand into equity trading and related financial products.
The exchange aims to provide market participants with transparent benchmarks that can support investment analysis and future financial products.
What Are NDEX and FINNDEX?
The two indices have been designed to track different sections of the Indian stock market.
NDEX comprises 20 large and liquid Indian companies selected from a universe of the top 60 companies listed on the National Stock Exchange (NSE).
FINNDEX tracks 15 financial sector companies, excluding insurance firms, selected from the top 40 eligible companies.
The indices use a selection methodology that considers market capitalisation, trading activity and stock volatility. This approach is intended to identify companies with meaningful market presence and sufficient trading liquidity.
By introducing these benchmarks, NCDEX is positioning itself to serve a broader range of market participants, including investors, traders and financial institutions.
How Will the NCDEX Indices Select Stocks?
The selection methodology for NDEX and FINNDEX combines four factors to assess eligible companies.
- Free-float market capitalisation: 30% — Measures the market value of shares available for public trading.
- Average daily traded value: 30% — Reflects the value of shares traded each day and helps assess liquidity.
- Beta: 20% — Indicates how a stock’s price movements relate to the broader market.
- Volatility: 20% — Measures the extent to which a stock’s price fluctuates over time.
The methodology aims to balance company size and trading activity with market-related risk indicators.
NCDEX has also introduced a maximum weight limit of 15% for any single stock at each rebalancing. This restriction is intended to reduce excessive concentration in individual companies and improve diversification within the indices.
Index Rebalancing to Take Place Twice a Year
NDEX and FINNDEX will undergo regular reviews and rebalancing twice annually, in March and September.
The exchange has also made provisions for changes outside the regular review cycle when specified circumstances require an index to be reconstituted.
Periodic reviews can help ensure that the indices continue to reflect eligible companies and prevailing market conditions. Changes in stock liquidity, market capitalisation and other selection criteria may affect which companies qualify for inclusion.
The 15% individual stock limit will also help manage the influence of larger constituents on overall index performance.
NCDEX Plans to Become a Multi-Segment Exchange
The launch of NDEX and FINNDEX forms part of NCDEX’s broader strategy to expand its business beyond agricultural commodity trading.
The exchange has also diversified into mutual fund transaction services and is preparing to establish a presence in the equity market.
NCDEX Managing Director and Chief Executive Officer Vikas Goel described the launch as an important milestone in the organisation’s transition towards becoming a multi-segment exchange.
He also highlighted the growing importance of transparent and well-designed benchmarks as India’s capital markets attract more domestic and international participation.
The new indices could provide a foundation for additional products and services as the exchange expands its offerings.
When Will NCDEX Enter the Equity and Derivatives Markets?
NCDEX’s planned expansion into equities remains subject to regulatory approvals.
According to the report, the exchange expects to receive final approval from the Securities and Exchange Board of India (SEBI) for its equity segment in January.
Sources cited in the report also indicated that NCDEX could introduce derivatives linked to NDEX and FINNDEX after securing the necessary regulatory approval during the second half of the next financial year.
Such products could allow market participants to gain exposure to the indices through contracts designed for trading or risk management. However, their introduction will depend on the relevant approvals and the exchange’s implementation plans.
The launch of the two benchmarks therefore represents an initial step in NCDEX’s wider financial-market expansion rather than the completion of its equity-market entry.
What the New Indices Mean for Investors
The introduction of NDEX and FINNDEX could broaden the range of benchmarks available to market participants in India.
NDEX will focus on a selection of large and liquid companies across the equity market, while FINNDEX will concentrate on eligible financial sector stocks. This distinction could help investors analyse different parts of the market through dedicated index measures.
The indices may also support the development of future financial products if the exchange receives the required regulatory approvals.
However, the launch of an index does not guarantee investment returns. Investors will need to assess the underlying constituents, index methodology, market conditions and risks before making investment decisions based on any related product.
Conclusion
NCDEX’s launch of NDEX and FINNDEX signals a significant step in its plans to diversify beyond agricultural commodities and enter a wider range of financial markets. With defined stock-selection criteria, limits on individual constituent weights and twice-yearly rebalancing, the indices are designed to offer structured benchmarks for Indian equities and financial companies.
The next major developments will depend on regulatory approval for NCDEX’s equity segment and its plans for potential index derivatives. If these initiatives progress as expected, the exchange could gradually expand its role in India’s evolving capital markets.
