Nifty High Dividend Yield 15 Index: A Dividend Basket Dominated by PSUs 01Oct2026
(This is my 537th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.
The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance.
Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)
The article is about Nifty High Dividend Yield Index, introduced by NSE Indices Ltd, a subsidiary of India's premier exchange, NSE India on 30Sep2026.
The newly-launched and dividend-focused index tracks 15 companies from the Nifty Total Market selected using dividend yield scores.
How the Index Works
The index uses trailing 12-month dividends relative to market capitalisation to determine dividend yield scores. Weights combine the dividend yield score with free-float market capitalisation, with each stock capped at 10 per cent.
The index will be rebalanced twice a year, in June and December.
Chart 1 showing Stock-wise List and Weights >
A Strong PSU Presence
The index has a notable PSU presence. Seven of its 15 constituents are PSUs (public sector undertakings, including one public sector bank), accounting for 63.7 per cent of the index.
The largest holdings include BPCL, TCS, Indian Oil, ONGC and Coal India, with several constituents close to the 10 per cent individual-stock cap.
The top five stocks account for more than 50 per cent of the index, while the top ten account for 90 per cent. Thus, despite having 15 constituents, the index is substantially concentrated in a relatively small number of companies and sectors.
Potential investors need to consider this high concentration risk before making any investments.
A Quirky Inclusion
JSW Dulux is an interesting and quirky example of the limitations of a purely mechanical dividend strategy. The company entered the index with a substantial recent dividend history inherited from its earlier avatar as Akzo Nobel India, including a Rs 156 special dividend in Aug2025.
But following the change in control to JSW group, its future dividend policy could be different. Since the Nifty High Dividend Yield 15 uses trailing 12-month dividends rather than forecasts of future payouts, the stock can qualify today even if its high dividend yield proves temporary.
If dividends moderate, the stock's trailing yield—and consequently its place in the index—could change at a future review.
Heavy Sector Concentration
The concentration is even clearer at the sector level. oil & gas sector accounts for 44.3 per cent, information technology (IT) for 26.9 per cent and financial services for 15.3 per cent. Together, these three sectors make up 86.5 per cent of the index.
It may be noted that the oil & gas sector is particularly sensitive to geopolitical developments and global energy prices, as illustrated by the adverse impact of the recent Iran war on the Indian economy.
Chart 2 showing Sector wise concentration >
What It Means for Investors
Concentration risk: For investors, the key point is that high dividend yield does not eliminate equity risk. The new index provides a systematic dividend-focused basket, but its substantial PSU, sector and company concentration is an important feature to understand alongside its dividend focus.
In short, any passive exposure to such indices with high concentration risk may not be suitable for most investors. As the index was introduced only yesterday, the chances of any passive funds being launched in the next few months based on the index are slim.
