The Nifty Auto is a sectoral index created by NSE Indices Limited, a subsidiary of the National Stock Exchange (NSE). The index is designed to measure the performance of automobiles and auto ancillary stocks listed on the NSE, comprising companies engaged in manufacturing of automobiles including passenger cars, commercial vehicles, two-wheelers, and three-wheelers, as well as auto-ancillary companies.

The Nifty Auto index is reviewed and rebalanced semi-annually. Nifty Auto consists of 16 of the largest companies in the Indian automotive sector.

The company must be part of the Nifty 500 index. If the number of stocks eligible to represent the Nifty Auto index is below 10, the deficit stocks shall be selected from the top 800 companies in terms of average daily turnover and average daily full market capitalisation for the last six months.

The company must be a part of the automobile sector and must have had a trading frequency of at least 90% in the last six months. The company must have a listing history of at least 1 month as of the specified cut-off date.

The final set of 15 companies will be selected from the list of eligible stocks on the basis of free-float market capitalisation. The weightage of a single stock shall not exceed 33%, and the weightage of the top three stocks shall not be more than 62%.

Step 2 computes the Nifty Auto index value: Nifty Auto = [(Free-Float Market Cap of All Constituents x Base Index Value) ÷ Base Market Cap]. Here, the base index value is 1,000, and the base market cap is the market capitalisation of all of the index's stocks as of the base date of January 1, 2004.