Groww rolls out Nifty Capital Markets ETF, FoF for passive exposure to India’s financial backbone

Groww Mutual Fund has launched two new passive investment schemes — the Groww Nifty Capital Markets ETF and the Groww Nifty Capital Markets ETF Fund of Fund (FoF) — offering investors structured access to India’s expanding capital markets ecosystem. Both schemes are designed to mirror the performance of the Nifty Capital Markets Index – TRI, a benchmark that captures the growth of companies forming the backbone of India’s financial market infrastructure. As purely passive offerings, they follow a rules-based, transparent, and low-cost approach suitable for investors seeking theme-based exposure without the complexity of stock picking.

The Groww Nifty Capital Markets ETF will invest directly in the constituents of the Nifty Capital Markets Index in the same proportion, subject to tracking error. This allows investors to participate in the performance of key capital market players such as exchanges, brokers, depositories, and asset management companies. The ETF FoF, on the other hand, invests primarily in units of the Groww Nifty Capital Markets ETF, making it suitable for investors who prefer traditional mutual fund structures while still gaining access to the underlying theme. Together, these schemes open the door for a diverse set of investors to benefit from India’s listed market ecosystem — including entities like registrars, clearing corporations, and AMCs.

The launch comes at a time when India’s capital markets are experiencing structural, long-term growth. Over the past two decades, rising investor participation, regulatory modernization, and strengthening financial market infrastructure have transformed the landscape. The Nifty 500 TRI has expanded 10.71 times since 2005, outperforming several global indices and signaling India’s robust equity market progress. Simultaneously, the number of demat accounts and mutual fund folios has surged to record highs, reflecting deepening retail participation.

India’s total market capitalsation reached $5.3 trillion in March 2025 and is projected to grow to USD 10 trillion by 2030. Mutual fund assets, too, have expanded rapidly — rising to nearly Rs 80 lakh crore in October 2025, with expectations of touching Rs 130 lakh crore by 2030. This strong market expansion underlines the relevance of thematic passive products that track key components of the financial ecosystem.

The Nifty Capital Markets Index itself selects the largest 20 companies from eligible industries within the Nifty 500, based on their six-month average free-float market capitalisation. It includes a balanced mix of stock exchanges such as BSE and MCX, asset managers like HDFC AMC, and market infrastructure institutions such as CAMS and CDSL. Existing options in the category include the Motilal Oswal Nifty Capital Market ETF, launched in March 2025, which has accumulated over Rs 86 crore in AUM.

Peer comparison: Motilal Oswal Nifty Capital Market ETF

The Motilal Oswal Nifty Capital Market ETF offers investors low-cost, passive exposure to India’s capital-market ecosystem—comprising exchanges, AMCs, depositories, and wealth-management firms. The fund replicates the Nifty Capital Markets Index, which selects the top 20 companies from the Nifty 500 based on six-month average free-float market capitalisation. As a newly launched thematic ETF (March 2025), long-term return data is currently unavailable, but its NAV stands at ₹47.27 as of 13 November 2025.

The portfolio is highly concentrated, with 100% allocation to financial services and only 15 stocks. The top holdings—BSE, HDFC AMC, MCX, CDSL, and 360 One WAM—collectively make up over 65% of the portfolio. While this offers targeted exposure to India’s fast-growing financial infrastructure sector, it also increases concentration and valuation risk, given the portfolio’s high P/E (40.52) and P/B (8.88) ratios.

Risk is elevated due to the cyclical nature of trading volumes, regulatory sensitivity, and overall market sentiment. Liquidity is reasonable for a new ETF with ₹99 crore AUM, but investors must be cautious about bid–ask spreads. This ETF suits high-risk, long-term investors seeking a structural market-infrastructure theme rather than broad diversification.

Category        Details
Fund Name    Motilal Oswal Nifty Capital Market ETF
Launch Date  March 2025
Category        Equity – Thematic (Capital Markets)
Objective       Replicate the Nifty Capital Markets Index (TRI)
NAV (13 Nov 2025)    Rs 47.27
AUM    Rs 99 crore
Expense Ratio    0.19%
Stocks Held    15
Sector Exposure    100% Financials
Top Holdings    BSE (22.57%), HDFC AMC (15.15%), MCX (13.07%), CDSL (7.83%), 360 One WAM (6.91%)
Valuation Metrics    P/E: 40.52, P/B: 8.88
Exit Load    Nil
Liquidity Notes    ETF liquidity dependent on market volumes; bid–ask spreads may vary
Risk Level    High (concentration + cyclicality + premium valuations)
Suitable For    High-risk, long-horizon investors (7+ years), thematic exposure seekers

For investors, the key appeal of the Groww ETF and its FoF lies in gaining diversified, low-cost exposure to India’s capital markets sector — an essential but often overlooked pillar of the economy — without the challenge of evaluating individual companies.