Nifty Microcap 250 Index

The Nifty Microcap 250 picks 250 of the smallest listed companies on NSE; the ones sitting just below the Nifty 500.

If the Nifty 500 holds the top 500 names by size, this index picks up where it leaves off. These are companies smaller than the usual large, mid, and small-cap universe most indices cover.

Since NSE Indices maintains the index, it serves as a reliable benchmark for fund managers to use for index funds, ETFs, and similar products focused on the microcap segment.

Anyone tracking the Nifty Microcap 250 live can view India's microcap layer that often sits outside the regular mid and small-cap conversations.

The selection of stocks in the Nifty Microcap 250 index runs on a clear size rule. Here is how it works:

• Universe outside Nifty 500: Companies that are part of the Nifty 500 are ineligible. By index design, the universe starts beyond it.
• Size ranking: The remaining listed names are ranked by their six-month average full market capitalisation.
• Top 250: The next 250 companies after the Nifty 500 cut-off are picked for the index.
• Inclusion buffer: Stocks ranked between 351 and 675 (based on full market cap) are compulsorily included to provide a clear entry band.
• Eligibility filters: Liquidity, trading history, and other standard NSE filters are applied, so only investable names go in.
• Review & rebalancing: The index is reviewed semiannually, with cut-off dates of January 31 and July 31.

The index uses the free-float market capitalisation method, which is used by most broad NSE indices.

• Weight basis: Each stock's weight comes from its free-float market value \u2014 the shares actually available for public trading.
• No factor tilt: Unlike strategy indices, there's no momentum or quality score layered on top. It's a straight size-weighted index.
• Real-time calculation: Since the index value moves parallel to the underlying stock prices, the Nifty Microcap 250 share price also follows the same.
• Two versions: Along with the regular price index, a Total Returns version is also published. This total returns version adds dividends back in.

Let us look at some benefits of investing in NSE's Nifty Microcap 250 stocks:

• Access to a different part of the market: The index covers companies sitting outside the usual large, mid, and small-cap universe \u2014 a segment many investors don't track closely.
• Wider lens on India's listed market: Along with the Nifty 500, the Nifty Microcap 250 helps round out the picture of India's broader equity universe.
• Rule-based selection: Inclusion follows a clear size-based rulebook with scheduled reviews with no sudden reviews.
• Diversified basket: With 250 names from across sectors, the index isn't concentrated in any one company or industry.
• Benchmark for microcap products: The index is generally used as a reference for funds and ETFs built around microcap stocks.

With Anand Rathi's TradeMobi platform, investing in the Nifty Microcap 250 or any of the NSE indices is simple.

Here's how to get started:

1. Step 1: Open / Login to Your Account

   
   Start by registering yourself and opening your demat account and trading account.

2. Step 2: Explore Investment Options

   
   Search for the relevant funds or ETFs that track the Nifty Microcap 250 index.

3. Step 3: Choose Your Investment

   
   Pick a suitable option based on your understanding and risk appetite, and invest.

4. Step 4: Invest and Track

   
   Once invested, you can track the Nifty Microcap 250 share price regularly — right from your dashboard.

5. Step 5: Stay Updated

   
   Use research tools and insights to follow developments in this domain.

The Nifty Microcap 250 index was launched by NSE Indices on May 10, 2021, with a base date of April 1, 2005, and a base value of 1000. Its live track record starts at launch, while the older numbers from the base date are backtested rather than representing real returns.

It was created to extend NSE's index coverage beyond the Nifty 500 into the microcap layer, which had earlier sat outside any formal benchmark.

Since launch, the Nifty Microcap 250 has also been combined with the Nifty 500 to form the Nifty Total Market index, giving a fuller picture of India's listed equity universe.

Over time, the index has been used as a benchmark for funds and products that want to take exposure to India's microcap segment.