Nifty 500 Multicap 50:25:25

Nifty 500 Multicap 50:25:25

NIFTY500 Multicap 50:25:25 is a broad-based index traded on the National Stock Exchange (NSE) that aims to track the performance of big, mid, and small-cap stocks. It is a diversified index of 500 stocks based on free-float market capitalisation. It includes 100 stocks from NIFTY 100, 150 from NIFTY Midcap 150, and 250 from NIFTY Smallcap 250. These stocks represent 21 economic sectors, including financial services, IT, oil, etc. 

The NIFTY500 Multicap 50:25:25 index was introduced on December 2, 2020, with a base date of April 1, 2005 and a base value of 1000. It is owned and maintained by NSE Indices Limited, formerly India Index Services & Products Limited.

Stock Selection Criteria for Nifty 500 Multicap 50:25:25

To be eligible for inclusion in the NIFTY500 Multicap 50:25:25, firms must meet the following criteria:

1. It should be listed on the National Stock Exchange.
2. It should be part of the NIFTY 500 index at all times.
3. Every quarter, large-cap stocks from NIFTY 100 should be weighted at 50%, mid-cap stocks from NIFTY Midcap 150 at 25%, and small-cap stocks from NIFTY Smallcap 250 weighted at 25%.
4. A company must weigh its stock in the relevant size group based on its float-adjusted market capitalisation value.
5. The index weights are rebalanced quarterly in March, June, September, and December.
6. Equity securities having differential voting rights (DVR) may be included. The DVR security will be divided into three segments depending on its combined entity value: large, mid, and small. The weight of both the parent and DVR security shall be distributed in the same proportion as their float-adjusted market cap value.

How is NIFTY500 Multicap 50:25:25 Calculated?

The NIFTY500 Multicap 50:25:25 is calculated by weighing its 501 companies based on a free-float market capitalisation with respect to a certain base market capitalisation value in real time.

The index value is calculated using the following formula:  

Index value = Current market capitalisation / (Base market capitalisation * Base Index Value)

Reconstitution of Index 

• The NIFTY500 Multicap 50:25:25 index is evaluated semi-annually, with six months of data collected in January and July of each year. 
• The replacement of stocks (if any) begins on the final trading day of March and September. 
• Temporary reconstitution may occur when stocks are withdrawn from the NIFTY 500 index, or in the event of delisting, suspension, etc.