Nifty Midcap 50

What is the Nifty Midcap 50?

The Nifty Midcap 50 is a broad market stock index created by the National Stock Exchange (NSE). The index tracks the performance of 50 companies in the mid-cap segment listed on the NSE. Mid-cap companies are those that are ranked between 101 and 250 in terms of full market capitalisation.

The primary objective of the Nifty Midcap 50 index is to capture the performance of the mid-cap segment of the Indian equity market. The index serves as a benchmark for investors and mutual fund managers interested in investing in mid-cap companies or tracking the performance of this segment.

The Nifty Midcap 50 index is designed in such a way that it represents about 7% of the total free-float market capitalisation of all of the stocks listed on the National Stock Exchange. The top five sectors in the Nifty 50 Midcap include financial services, capital goods, healthcare, automobiles and auto components, and information technology. Here is a quick overview of the top 10 constituents of the Nifty Midcap 50 stock list in terms of weightage.

What is the calculation method for Nifty Midcap 50?

The Nifty Midcap 50 index is calculated using the free-float market capitalisation method. Here is a quick overview of how the index value is arrived at.

Step 1: Calculation of free-float market capitalisation

Firstly, the market capitalisation of every stock in the Nifty Midcap 50 index is calculated. The following mathematical formula is used for the calculation:

Market Capitalisation = Current Market Price x Number of Shares Available for Trading

Once the market cap of every stock is calculated, it is adjusted for free float. This is done by multiplying market capitalisation with a free-float factor. Here is the mathematical formula used for calculating it.

Free-Float Market Capitalisation = Market Capitalisation x Free-Float Factor

Note: The free-float factor will be different for each company, depending on the percentage of shares freely available for trading.

Step 2: Calculation of index value

Once the free-float market capitalisation for each stock is calculated, the index value is then computed using the following mathematical formula:

Nifty Midcap 50 Value = [(Free-Float Market Cap of All Stocks x Base Index Value) ÷ Base Market Cap]

Here, the base date is set as January 1, 2004, and the base index value is taken as 1,000. The base market cap is the market capitalisation of all the stocks in the index as of January 1, 2004.

Selection criteria for stock inclusion in the Nifty Midcap 50

For a stock to be included in the Nifty Midcap 50 index, it needs to satisfy a list of criteria. Let us quickly look at some of the key conditions that need to be satisfied.

The stock must be a part of the Nifty Midcap 150 index to be considered for inclusion in the Nifty Midcap 50.

The top 100 companies (from the Nifty Midcap 150 index) based on the average daily full market cap and average daily turnover during the previous six months are considered for inclusion in Nifty Midcap 50. Out of this list, the top 50 stocks based on their average free-float market capitalisation for the last six months are selected for inclusion in the Nifty Midcap 50. When shortlisting, stocks that are present in the F&O segment are given priority.

The top 30 F&O stocks in terms of the average free-float market cap for the last six months from the Nifty Midcap 150 are included in the Nifty 50 Midcap index.

If the full market capitalisation of an F&O stock in the Nifty Midcap 150 is at least 1.5 times the last constituent in the Nifty Midcap 50, it would be eligible for inclusion.

A non-F&O stock will be included in the index if its free-float market cap is at least 1.5 times the free-float market cap of the smallest non-F&O index constituent.

Stocks will be excluded from the Nifty Midcap 50 index if their rank falls below 70 in the top 100 companies in terms of the average free-float market capitalisation for the last six months.

Stocks will also be excluded from the index if they are excluded from the Nifty Midcap 150.

The Nifty Midcap 50 is reviewed and rebalanced semi-annually in January and July. If there are any changes to the stocks in the index, they are done on the last day of March and September. Such regular reviews and rebalancing are done to ensure that the index continues to represent the mid-cap segment accurately.

Nifty Midcap 50 FAQ's