Groww Mutual Fund has launched the Groww Nifty Cement ETF, tracking the Nifty Cement Index. The new fund offer is open from July 8 to July 22 with a minimum investment of ₹500. This fund offers exposure to India's construction sector, which is supported by rising infrastructure spending and urbanization.
Groww Mutual Fund has launched the Groww Nifty Cement ETF, an open-ended fund designed to mirror the performance of the Nifty Cement Index. Investors looking for sector-specific exposure can subscribe to the new fund offer (NFO) between July 8 and July 22, 2026. The ETF is designed as a low-cost vehicle, allowing investors to participate in the performance of major Indian cement manufacturers with a minimum investment of ₹500.
Sector Demand and Infrastructure Spending
The launch comes at a time when the Indian cement industry is seeing increased activity tied to national infrastructure development. The 2026-27 Union Budget earmarked ₹12.2 lakh crore for public capital expenditure, a significant portion of which is dedicated to transportation projects like roads and bridges. These initiatives are primary demand drivers for cement. Industry data supports this trend, showing cement production reached 443.2 million tonnes as of February in FY26, representing a 9.2% increase compared to the previous year. Furthermore, the domestic cement market is expected to add significant production capacity, with projections suggesting an increase of 270-275 million tonnes over the next five years.
Investment Context and Market Position
While India is the second-largest cement producer globally, contributing about 11% to the world's total output, per capita consumption remains relatively low at approximately 313 kg. This level is well below the global average, which some analysts believe indicates room for long-term growth as urbanization continues. The industry has also seen significant consolidation, with the top players now holding nearly 60% of the total installed capacity. The Nifty Cement Index, which this ETF tracks, includes 20 companies from the Nifty Total Market Index. As of June 22, 2026, the index portfolio featured prominent companies such as UltraTech Cement, Grasim Industries, Shree Cement, Ambuja Cements, and JK Cement.
Valuation and Risks
For investors evaluating the sector, the index valuation as of June 30, 2026, stood at a price-to-earnings (P/E) multiple of 17.54. This figure is lower than the index's five-year average of 19.20 and its 10-year average of 24.73. However, investors should be aware of the inherent risks in sector-specific funds. Unlike diversified mutual funds, an index ETF focusing on a single industry is highly sensitive to sector-specific pressures. These include fluctuations in raw material and energy costs, such as coal and petcoke prices, as well as potential delays in government infrastructure project execution. Additionally, regional demand-supply imbalances and intense competition among major players can affect profit margins across the industry. The performance of the fund will ultimately depend on the demand environment and the operating efficiency of the underlying companies within the index.