NIFTY Midcap 150 is an important index that tracks the performance of mid-sized companies in India. It is part of the larger NIFTY index family. As the name suggests, is an index comprising 150 companies ranked 101-250 based on full market capitalisation from the NIFTY 500 Index. These companies fall between large-cap and small-cap companies in terms of market capitalisation. The index serves as a barometer of the mid-cap segment's performance in the Indian stock market. The index represents about 15% of the free float market capitalisation of the stocks listed on NSE as on September 29, 2023. The index is constructed in a manner that the 150 companies that comprise the index belong to different sectors and have different weights.
Understanding NIFTY Midcap 150
NIFTY Midcap 150 comprises 150 mid-sized companies in India, ranked between 101st to 250th based on their market capitalization. This index reflects the performance of these companies in the stock market. Investing in NIFTY Midcap 150 allows investors to participate in the growth of these companies, potentially yielding favorable returns over time.
The components of the NIFTY Midcap 150 index are selected from the broader NIFTY 500 Index, focusing on companies ranked between 101st to 250th in terms of market capitalization. Market capitalization is a crucial metric derived by multiplying a company's stock price by the total number of outstanding shares, including both actively traded shares and those held by promoters or the government.
The structure of the NIFTY Midcap 150 index ensures a diverse representation of mid-sized companies across various sectors, providing a comprehensive view of the market. It encompasses companies poised for growth and expansion, making it an appealing investment option.
How weightage of different companies and sectors in NIFTY Midcap 150 is decided?
The weightage of companies within NIFTY Midcap 150 is determined based on their free-float market capitalisation. The free-float market cap is calculated by multiplying a company’s stock price with the number of shares readily available in the market. Essentially, larger companies within the mid-cap segment receive a higher weightage. The same principle applies to sectors, their weightage is influenced by the combined market capitalization of their constituent companies.
Also read - What are multi-cap funds?
How to invest in the NIFTY Midcap 150 index?
To invest in the NIFTY Midcap 150 Index, you can consider various options, including:
- Exchange-Traded Funds (ETFs): ETFs designed to replicate the performance of this index are traded on stock exchanges. You can buy these ETFs online through the Bajaj Finserv platform.
- Mutual Funds: Some mutual funds aim to match the performance of the NIFTY Midcap 150 index. You can invest in these index funds directly through Asset Management Companies (AMCs) or through the Bajaj Finserv platform.
- Direct Stock Investment: You can directly invest in the constituent companies of the index. However, this approach might require more research and analysis.