Four years ago, I made the decision to invest in Alkem solely based on its inclusion in the Nifty Next 50 index. It was in September 2020 that Alkem was included in the Nifty Next 50 index1. Without conducting any further research, I relied on the belief that companies included in Nifty Next 50 index are generally considered to be well-established and stable. And, there is a high chance of them moving to Nifty 50 index.
But what I didn’t consider was that Alkem can also be removed from the Nifty Next 50 index. And this is what happened in August 2021.
My investments in Alkem have been almost evenly spread out since last three fiscal years. For the current fiscal year, 2024-25, I have not made any investment as of now. Although I planned to increase my investment in Alkem, other financial considerations have prevented it from happening.
The notional profits were non-existent for the first three years of my investment. The only solace at that time was that other indices weren’t doing great either. It was only in the last one year that Alkem has seen an uptick in its share price.
As of today, comparing my investment in Alkem to the Nifty Pharma, Nifty 500, Nifty 50, and Nifty Next 50 indices, I am outperforming all except the Nifty Next 50. At the start of 2024, there was a brief period when my investment in Alkem outperformed all indices, and I couldn’t help but think, take that index investing!
All my investment in Alkem has completed more than a year so the XIRR of 21.7% does look impressive. Although with just four years in my investment is still young.
Footnotes:
- I have prepared a Google Sheet which can give you a the historical stock composition of Nifty 50 and Nifty Next 50 index. Check it out over here. ↩︎