What is the Nifty 150 Midcap Index: Constituent Stocks, Sectors, and Returns

The Nifty 150 Index consists of 150 listed companies that are ranked 101st to 250th on the basis of their full market cap. These 150 mid-cap companies are part of the larger Nifty 500 Index and have a market cap that is lower than the top 100 listed companies ranked on the basis of market cap.

The term full market cap signifies that the value of all active and inactive shares is taken into account for the calculation. Inactive shares are those held by the government or promoters, whereas active shares are available in the market for trading. Nifty 150 Index is a broad based index, so it includes stocks from different sectors and each stock is assigned a different weight on the index.

The selection methodology chosen for the Nifty 150 stocks selection is known as the free float market capitalization methodology. The index level reflects every stock's free float market capitalization.

According to the free float market cap methodology, a company's market cap is assessed by considering only those stocks available in the market for trading. It doesn't include the shares which are locked in (i.e. not available for trade on the open market) and reserved for entities like promoters, directors, founders, and partners. Also, stocks held in private equity, hedge, equities, and mutual funds under cross-holding & trusts are excluded.

Free float market capitalization also goes by float-adjusted capitalization. You should note that market capitalization derived from free float market cap methodology will always be lower than that derived from full market cap methodology. After the free float market cap is calculated, listed stocks are ranked by their value. Then listed company stocks that are ranked between 101st and 250th on the basis of free-float market cap are included in the Nifty Midcap 150 Index.

The table below lists the 10 stocks with the highest weight featured on the Nifty Midcap 150 Index along with their individual weight in descending order:

*_ Weight data valid as of September 30, 2023_

So, any Index Fund or Exchange Traded Fund (ETF) that tracks the Nifty Midcap 150 Index would feature the above stocks as per the weight allocation shown above.

You can find the sectors represented on the Nifty Midcap 150 in the following table, along with their weights. The list follows a descending order as per the weights:

*_ Data retrieved on September 30, 2023_

As you can see, this midcap index is well diversified, so if you invest passively in this index via an Exchange Traded Fund (ETF) or Index Fund, your investment portfolio will feature broad sectoral diversification. This can mitigate overall investment risk to some extent.

As mentioned earlier, midcap stocks have higher long-term growth potential than large-cap stocks. So the returns of a midcap index like Nifty Midcap 150 Index are typically higher than large-cap indices like the Nifty 50 or Nifty 100. Below are the historical 1 year, 5 years and since inception returns of the Nifty Midcap 150 Index as of 30th September 2023:

While past returns of the index do not guarantee future returns, investors who make passive investments into the would have received comparable returns taking into account applicable tracking error.

Here are the key eligibility criteria for selection of equity midcap stocks as part of the Nifty Midcap 150 Index:

• The company stock should be listed as part of the Nifty 500 index.
• The company should rank between the 101st and 250th stocks based on its free-float market capitalization.
• Securities will also be included if the full market capitalization of the company is at least 1.5X that of the previous constituent in the NSE Midcap 150.
• If the company's rank is below 275 per its full market capitalization or the constituent stock is not a part of the Nifty 500, it will not be considered.
• The latest 3 months’ data will be evaluated, and as per the new data
• Investable Weight Factor should be a minimum of 0.10, indicating 10% of free float. However, if that is not possible, then as per an alternate condition, the company’s 6 months’ free float market cap should be 25% of its full float market cap of the same period of the smallest index constituent, which was active before index review.

You can invest in Nifty Midcap 150 Index in 3 different ways: