Maharashtra, with more than 1,200 listed companies, offers the widest pool, followed by Gujarat with more than 500. States such as Tamil Nadu and Karnataka, and the Andhra Pradesh-Telangana belt, also offer a substantial universe of listed companies
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Babu Babu
Of late, both major exchanges — the BSE and the National Stock Exchange (NSE) — have been launching indices at a rapid pace, covering a wide range of sectors, themes, market-cap segments and other market categories. In August alone, the BSE launched four indices, including the BSE REITs Index and BSE 500 Momentum Value 50 Index, while the NSE launched three — Nifty Defence Equal Weight Index, Nifty Next 100 and Nifty500 Growth 50 Index.
Today, the index landscape spans almost every facet of the market. There are broad market-cap-based indices such as the Sensex, Nifty and Nifty Next 50; factor-based indices such as the Nifty Alpha 50 and Nifty High Beta 50; and thematic indices tracking corporate groups and broader investment themes. These include group-specific indices covering names such as Aditya Birla, Mahindra and Tata, as well as themes such as Nifty IPO, Nifty SME Emerge and Nifty REITs & InvITs. Alongside these is a growing array of sectoral indices covering industries ranging from automobiles and IT to telecom and FMCG.
Passive is king
One of the key drivers behind the proliferation of indices is growing investor interest in passive investment products.
According to ICRA Analytics, total mutual fund AUM rose from ₹35.32 lakh crore in July 2021 to ₹85.76 lakh crore in July 2026, an increase of around 143 per cent. Passive funds, comprising ETFs and index funds, recorded an even sharper rise, with combined AUM increasing around 324 per cent from ₹3.57 lakh crore to ₹15.15 lakh crore over the same period. The trend reflects growing investor preference for market-linked exposure, diversification and cost-efficient investment options, according to ICRA Analytics.
Earlier, a stock index meant one thing: a barometer of the market’s mood. Not anymore. Indices are now investment instruments in their own right, underpinning index funds that track their performance and derivatives that enable investors to hedge risk. The NSE describes index-linked products as part of a multi-trillion-dollar global industry, with stock indices at its core.
There are currently more than 150 equity-based indices on the NSE and around 100 on the BSE.
A new frontier
Yet the index armoury may still have another arrow: State- and region-based indices.
Indices based on States such as Gujarat, Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh, Andhra Pradesh, Telangana and New Delhi, or region-specific indices covering the North, South, East, West and North-East, could offer investors a new way of gaining exposure to India’s diverse growth stories.
Competition among States to attract foreign and domestic investment has intensified, while the listed universe is deep enough to support such indices. Maharashtra, with more than 1,200 listed companies, offers the widest pool, followed by Gujarat with more than 500. States such as Tamil Nadu and Karnataka, and the Andhra Pradesh-Telangana belt, also offer a substantial universe of listed companies.
Strong public-sector companies in several States could further broaden the investible universe. Moreover, large business groups such as Tata, Birla, Ambani, Adani, Godrej, TVS, Murugappa, Bajaj, Mahindra and Jindal have interests spanning multiple States and sectors.
Such indices could offer a uniquely Indian investment theme in a country that thrives on — and celebrates — its diversity. Even the US has few state-specific investment themes, with the Texas Capital Texas Equity Index being one notable example, offering investors exposure to the economic growth of Texas.
With States increasingly competing to outgrow one another, the time may have come to capitalise on this theme. State-based indices could give investors another avenue to participate in high-growth regions, while encouraging States that lag behind to step up their efforts to attract investment and improve their economic performance.
Prime Minister Narendra Modi has consistently emphasised leveraging cooperative and competitive federalism for the country’s all-round development. Perhaps investible State-based indices could provide a market-oriented expression of that philosophy — giving investors a new opportunity while adding another dimension to India’s competitive federalism.