Nifty Midcap 50

What is NIFTY Midcap 50?

NIFTY Midcap 50 is a broad-based index on the National Stock Exchange (NSE) capturing the performance of the midcap segment of the equities market. It is a diversified index of 50 stocks selected from the NIFTY Midcap 150 index on the basis of full market capitalisation, especially the ones that carry derivative contracts on them. These stocks span 17 sectors of the economy, with almost 22% representation given to Financial Services, followed by Capital Goods, Automobile and Auto Components, IT, and Power. These top 5 sectors together account for more than 61% weightage.

Almost 6% of float-adjusted market capitalisation on NSE is represented by NIFTY Midcap 50 index. In the last six months, the traded value of all NIFTY Midcap 50’s constituents has approximated 13.3% of the total traded value of all stocks on NSE.

This NIFTY Midcap 50 index was launched with the base date as January 1, 2004, and the base value at 1000. The NIFTY Midcap 50 share price since inception, has breached the levels of 7000 at ~19 P/E multiples. It is reconstituted on a semi-annual basis.

 The NIFTY Midcap 50 index is owned and managed by NSE Indices Limited, previously known as India Index Services & Products Limited. The Midcap index is governed by a three-tier structure that comprises the BOD of NSE Indices, the Index Advisory Committee and the Index Maintenance Sub-Committee.

NIFTY Midcap 50 has a variant in the form of the NIFTY Midcap 50 Total Returns Index. This index is useful for launching index funds, ETFs, and structured products, as well as for benchmarking fund portfolios.

Nifty Midcap 50 Stocks Selection Criteria

The NIFTY Midcap 50 share price is computed by weighting its 50 stocks on the basis of free-float market capitalisation relative to a base market capitalisation value on a real-time basis since 2010.

To be inserted in the NIFTY Midcap 50 index, the companies must fulfil the following eligibility criteria:

1. It will be listed on the National Stock Exchange.
2. It will form a part of the NIFTY Midcap 150 index.
3. Will include the securities whose F&O constituent ranks among the top 30 on the basis of full market capitalisation in NIFTY Midcap 150.
4. Will include the securities whose F&O constituent’s full market capitalisation is 1.5 times of the last constituent in NIFTY Midcap 150.
5. Will exclude securities whose ranks based on full market capitalisation falls below 70 among NIFTY Midcap 150’s F&O constituents.
6. Will exclude securities if they are replaced from NIFTY Midcap 150 index.
7. Will exclude securities if they are removed from NSE’s F&O segment.
8. A newly listed security’s eligibility is verified based on the data for three months instead of six months.
9. Will include securities ranked in the top 30 among non-F&O stocks from NIFTY Midcap 150 index in case, not enough F&O stocks are available

How is Nifty Midcap 50 Calculated?

The index value is calculated as follows –

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

The NIFTY Midcap 50 index is reviewed semi-annually based on six months of data in the months of January and July each year. The replacement of stocks (if any), subject to a maximum of 5 in a given year, is implemented from the last trading day of March and September.