All about Nifty FMCG

If there’s one segment of products that’s consumed all throughout the year, irrespective of the current micro or macro economic situation, it is Fast Moving Consumer Goods (FMCG). According to several reports, the FMCG sector is among the country’s largest sectors and contributes a major chunk to the Indian economy. And this sector’s index is what we’re going to be focusing on in this chapter. Let’s begin with a short introduction on the Nifty FMCG Index. 

What is the Nifty FMCG Index?

Fast Moving Consumer Goods are a class of non-durable and consumable goods that are typically put to use on a daily basis. Cosmetics, health care products, packaged food, beverages, and toiletries, among others are a few examples of FMCG. The manufacturers of such FMCG play a huge role in an economy since they’re the primary drivers of consumer demand. 

To accurately measure the performance of FMCG manufacturers, the National Stock Exchange came up with the sectoral index - Nifty FMCG. The index is essentially a collection of 15 FMCG manufacturers, whose stocks are listed on the NSE. This allows individuals, traders, and fund managers, to measure and benchmark the performance of their portfolio or fund.

What are the constituents of the Nifty FMCG Index?

As you’ve already seen above, there are 15 different constituents in the Nifty FMCG Index. The list of companies and their respective index weightage are tabulated below.

Name of the company	Index weightage
Britannia Industries	5.50%
Colgate Palmolive (India)	2.92%
Dabur India	6.14%
Emami	1.42%
Godrej Consumer Products	4.69%
Hindustan Unilever	34.39%
ITC	16.81%
Jubilant Foodworks	2.61%
Marico	3.38%
Nestle India	10.75%
Procter & Gamble Hygiene & Health Care	2.79%
Tata Consumer Products	3.75%
United Breweries	2.13%
United Spirits	2.64%
Varun Beverages	1.87%

Now that you’ve taken a look at the companies, here are some key information about them and their business. 

1. Britannia Industries

• One of India’s oldest companies, Britannia Industries was established way back in 1892 in the city of Kolkata. 
• The company’s core business is in the manufacture of a variety of foods and beverages. 
• Biscuits, breads, dairy products, cakes, rusks, wafers, and croissants are a few of the products that the company manufactures. 

2. Colgate Palmolive (India)

• Colgate Palmolive is one of India’s leading manufacturers of personal care and oral care products. 
• The company markets its products under two brands - Colgate and Palmolive. 
• The Colgate brand of products focus primarily on oral care. Toothpastes, toothbrushes, and mouthwashes are a few of the products manufactured under this brand.
• The Palmolive brand of products focus on personal care. Handwashes and body washes are a few of the products manufactured under this brand.

3. Dabur India

• Dabur India is another FMCG manufacturer that traces its origins back to the late 1800s.
• The company is involved in the production of products based on ayurveda. 
• Dabur India’s product portfolio is comprehensive and includes hair oils, health supplements, digestives, oral care, skin care, shampoos, and home care products, among others.

4. Emami

• A very renowned FMCG manufacturer in India, Emami was established in 1974 in Kolkata. 
• The company’s primary business is in the manufacture of health care, personal care, and skin care products. 
• Right from hair oils and pain balms to fairness creams and hair colour, the company manufactures a wide range of consumer products. 

5. Godrej Consumer Products

• Founded in 2001, Godrej Consumer Products is another Indian FMCG manufacturer that’s involved in the personal care, skin care, and toiletries segments. 
• The company manufactures liquid detergents, hair colourants, room fresheners, and toiletries, among others. 
• Cinthol, Hit, Good Knight, and Aer are a few of the most popular brands owned by the company. 

6. Hindustan Unilever

• India’s largest FMCG manufacturer, Hindustan Unilever was established in 1933 and is a subsidiary of Unilever. 
• The company manufactures products under almost all of the FMCG segments including food, beverages, cleaning agents, personal care and health care products, and water purifiers. 
• Hindustan Unilever owns and controls around 64 major brands under various FMCG segments. 

7. ITC

• Another major FMCG manufacturer in India, ITC has a huge brand presence in the market. 
• The company produces FMCG goods under multiple segments, which includes cigarettes, foods, personal care products, education and stationery products, and lifestyle retail products, among others. 
• ITC owns and controls around 31 different brands across various FMCG segments. 

8. Jubilant Foodworks

• Jubilant Foodworks, one of India’s largest food service companies, was incorporated in 1995. 
• The company is the master franchise for two of the most famous international fast food chain brands - Domino’s Pizza and Dunkin’ Donuts. 
• In addition to these two brands, the company’s brand portfolio includes three others as well - Hong’s Kitchen, EKDUM!, and Chef Boss. 

9. Marico

• Incorporated in 1990, Marico is a major FMCG manufacturer based out of Mumbai. 
• The company produces various FMCG products under the health, beauty, and wellness segments. 
• Marico owns and operates around 21 different brands with Parachute and Saffola being the most popular among them. 

10. Nestle India

• Established in 1959, Nestle India is a subsidiary of Nestle, which is a Swiss multinational FMCG manufacturer. 
• The company’s primary business lies in the manufacturing of chocolate, food, confectionary, and beverages. 
• Some of the major and well-known brands controlled by Nestle India include Maggi, Nescafe, KitKat, and Cerelac. 

11. Procter & Gamble Hygiene & Health Care

• Procter & Gamble, the American multinational FMCG manufacturer, entered India in 1964. 
• Since its inception, the company has been involved in manufacturing health care, grooming, home care, fabric care, and personal care products. 
• P&G owns and controls around 13 famous brands such as Gillette, Old Spice, Oral B, Vicks, Ambi Pur, Head & Shoulders, Pampers, Ariel, and Tide. 

12. Tata Consumer Products

• Established in 1962, Tata Consumer Products is another part of the Tata Group of companies. 
• The company is the second largest producer and distributor of tea in the entire world. 
• Tata Consumer Products’ primary business focus is on tea, coffee, water, and foods, with the company controlling around 17 different brands. 

13. United Breweries

• Based in Bengaluru, United Breweries is one of India’s largest manufacturers of beverages. 
• The company is involved in the production of both alcoholic and non-alcoholic beverages and is widely known for its high quality beer.   
• UB controls as many as 30 different brands with Kingfisher being its flagship brand. 

14. United Spirits

• Part of the UB group, United Spirits is also headquartered in Bengaluru and is currently the second largest manufacturer of spirits in the entire world. 
• The company’s product portfolio includes as many as 50 different spirit brands including several home-grown ones as well as some iconic global brands.

15. Varun Beverages 

• Incorporated in 1995, Varun Beverages is an Indian bottling company that manufactures, bottles, and distributes all of PepsiCo’s beverages. 
• In fact, the company is the world’s second largest bottling company of PepsiCo.
• Varun Beverages is tasked with packaging of both carbonated and non-carbonated drinks of PepsiCo and distributing the same in India and other countries. 

Trading in Nifty FMCG

Similar to the Nifty Auto Index, the National Stock Exchange doesn’t offer any derivative contracts with the Nifty FMCG as the underlying asset. Therefore, you cannot trade in the Nifty FMCG Index directly. That said, there are plenty of FMCG mutual funds that utilize this sectoral index as a benchmarking tool for their performance evaluation.  

S&P BSE Fast Moving Consumer Goods: The BSE alternative

While there are only 15 constituents in the Nifty FMCG sectoral index, the BSE’s alternative - S&P BSE Fast Moving Consumer Goods - consists of as many as 63 different stocks. This includes all of the 15 constituents in the Nifty FMCG and an additional 48 stocks, making the BSE’s alternative broader and more comprehensive than NSE’s FMCG Index.  

Wrapping up

And now, we’ve come to the end of another chapter on sectoral indices. In the forthcoming chapter, we’re going to be focusing on one of the biggest sectors in Indian economy - Information Technology (IT).  

A quick recap

• Fast Moving Consumer Goods are a class of non-durable and consumable goods that are typically put to use on a daily basis. 
• Cosmetics, health care products, packaged food, beverages, and toiletries, among others are a few examples of FMCG.
• To accurately measure the performance of FMCG manufacturers, the National Stock Exchange came up with the sectoral index - Nifty FMCG. The index is essentially a collection of 15 FMCG manufacturers, whose stocks are listed on the NSE. 
• The constituents of this index are Britannia Industries, Colgate Palmolive (India), Dabur India, Emami, Godrej Consumer Products, Hindustan Unilever, ITC, Jubilant Foodworks, Marico, Nestle India, Procter & Gamble Hygiene & Health Care, Tata Consumer Products, United Breweries, United Spirits and Varun Beverages. 
• Similar to the Nifty Auto Index, the National Stock Exchange doesn’t offer any derivative contracts with the Nifty FMCG as the underlying asset. 
• The BSE’s equivalent FMCG sectoral index is the S&P BSE Fast Moving Consumer Goods.
• Unlike the Nifty FMCG Index, the S&P BSE Fast Moving Consumer Goods consists of as many as 63 different stocks. This includes all of the 15 constituents in the Nifty FMCG and an additional 48 stocks, making the BSE’s alternative broader and more comprehensive than NSE’s FMCG Index.