Nifty Microcap 250

About Nifty Microcap 250 Index

The goal of the Nifty Microcap 250 index is to monitor the performance of microcap stocks that are listed or allowed to trade on the NSE. The index comprises the top 250 firms that are not included in the Nifty 500 index, chosen based on their average entire market capitalization. A stock's free-float market capitalization determines how much weight it has. 

Sector-Wise Representation in Nifty Microcap 250 Index

The sector representation includes Capital Goods, Financial Services, Construction, Healthcare, Chemicals, Power, Fast Moving Consumer Goods, Automobile and Auto Components, Consumer Durables, Consumer Services, Services, Realty, Textiles, Information Technology, Metals & Mining, Media, Entertainment & Publication, Utilities, Construction Materials, Oil, Gas & Consumable Fuels, Diversified, Forest Materials, and Telecommunication. 

Management of the Nifty Microcap 250 Index 

The NSE Indices Limited Board of Directors, the Index Advisory Committee (Equity), and the Index Maintenance Sub-Committee make up the three tiers of the governance structure.  

Eligibility Criteria for Inclusion in the Nifty Microcap 250 Index 

• To be eligible for inclusion, the company must have its registered office in India and trade on the National Stock Exchange (NSE) (listed, traded, or not listed but allowed to trade).
• Not eligible for inclusion are convertible stocks, bonds, warrants, rights, and preferred stocks that offer a guaranteed fixed return, as well as stocks that are suspended and classified as part of the BZ series.
• If the stated DVR-related conditions listed below are met, equity shares having differential voting rights (DVR) may be included in the index.
• Businesses must have had an average impact cost for the preceding six months of no more than 1%.
• Businesses in the top 1000 according to average daily turnover and average daily complete market capitalization using data collected over the preceding six months. There may be less than 250 qualifying stocks in the universe after the impact cost filter has been applied. If there are fewer than 250 eligible stocks in the universe, the shortfall stocks will be chosen from the stocks in the top 1100, top 1200, and so on lists based on average daily turnover and average daily full market capitalization from data collected over the previous six months. This process will be continued until at least 250 eligible stocks are found.
• Off. Doc.: Methodology Document, July 2024, 20240517 The investible weight factor (IWF) of the stock shall at least be 0.10 that is, 10% free float. Alternatively, a stock's six-month average free-float market capitalization must be at least 25% of the six-month average market capitalization of each of the six Nifty Indices. The 27-month average of the complete market capitalization of the Nifty Microcap 250 as of the cut-off date is divided by the full market capitalization of the smallest index member as of the previous index review.
• During the preceding six months, at least 90% of the days were spent with company trading.
• Instead of using data for six months, eligibility criteria for newly listed securities are reviewed using data for one month.
• If a company has completed one calendar month of trading as of the cut-off date after the stock has traded on an ex-basis and meets all eligibility requirements for inclusion in the index, it will be eligible for inclusion in the index at the time of index reconstitution. Examples of such corporate events include demergers and capital restructurings.

Index Rebalancing of the Nifty Microcap 250 Index 

The last trading days of March and September will mark the semi-annual index rebalancing, which will be based on six-month-ended average data for January and July, respectively.

In addition to the planned semi-annual review, if any of the index constituents is removed from the Nifty Microcap 250 index chart as a result of a corporate action (delisting, scheme of arrangement, etc.) or suspension by the exchange, etc., further ad hoc reconstitution and rebalancing of the index shall be initiated. 

Indexes will be checked for conformity with the portfolio concentration standards for ETFs and index funds, which were released by SEBI on January 10, 2019, every quarter. Appropriate corrective action will be implemented in the event of non-compliance to guarantee adherence to the standards. 

Financial Performance of the Nifty Microcap 250 Index

The Nifty Microcap 250 Index price has given total returns of 19.38% since its inception and 43.58% in the last 5 years. The index has a QTD return of 5.36%.