Nifty Microcap 250

The Nifty Microcap 250 Index is designed to track the performance of microcap stocks listed on the NSE, focusing on the top 250 companies that fall outside the Nifty 500. These microcap companies represent smaller, emerging businesses with potential for high growth, making the index an attractive option for investors seeking to capitalize on opportunities in the lower market segments. 

The index uses free-float market capitalization to determine the weight of each stock, reflecting the market value of shares available for public trading. With a focus on liquidity and turnover, the Nifty Microcap 250 provides a comprehensive view of India’s microcap space, offering a diversified and dynamic approach for investors.
 

The Nifty Microcap 250 Index tracks the performance of microcap stocks listed or permitted to trade on the NSE. It consists of the top 250 companies that are not part of the Nifty 500 index, selected based on their average full market capitalization. 

The index provides a comprehensive view of smaller companies beyond the larger, more established ones included in other indices. Each stock's weight in the index is determined by its free-float market capitalization, ensuring that the index reflects the market value of shares available for trading.

The Nifty Microcap 250 Index value is calculated using a free-float market capitalization-weighted method. The calculation involves multiplying the price of each constituent stock by its free-float market capitalization and alpha value. The stock with the highest alpha gets the highest weight in the index.

The formula for calculating the index value is:

Index Value = (Current Market Value of Constituents / Base Market Value) x Base Index Value

The base index value is typically set at 1000, and adjustments are made for corporate actions like stock splits and dividends to maintain accuracy. The index is reviewed and rebalanced periodically, ensuring it reflects the performance of high-alpha stocks in the market. This method helps investors track stocks with superior risk-adjusted returns.

The Nifty Microcap 250 Index has specific eligibility criteria for selecting stocks. Companies must be ranked within the top 1000 based on their average daily turnover and average daily full market capitalization, using data from the previous six months. This ensures the inclusion of actively traded companies with substantial market presence. However, stocks that are part of or are being included in the Nifty 500 Index are ineligible for inclusion in the Nifty Microcap 250 Index.

Stocks ranked between 351 and 675 in terms of their six-month average full market capitalization are compulsorily included in the index. This helps maintain a focus on microcap companies while filtering out larger, more established firms. If an existing stock becomes ineligible by failing to meet any of these criteria, it will be compulsorily excluded from the index in the next review.

The weight of each stock in the index is determined by its free-float market capitalization, which accounts for the shares available for public trading. This method ensures that the index reflects the actual market value of each stock's tradable portion.
 

The Nifty Microcap 250 Index tracks the performance of the top 250 microcap companies listed on the NSE, beyond the Nifty 500. Stocks are selected based on their average daily turnover and full market capitalization over the past six months. To maintain a focus on smaller companies, any stock included in the Nifty 500 becomes ineligible for the index.

Stocks ranked between 351 and 675 by market capitalization are automatically included, while stocks that no longer meet the criteria are excluded. Each stock’s weight in the index is determined by its free-float market capitalization, ensuring the index reflects the actual value of shares available for public trading. The index is regularly reviewed to keep it aligned with market movements.
 

Investing in the Nifty Microcap 250 Index offers exposure to emerging and smaller companies with high growth potential. As the index tracks 250 microcap stocks, it provides diversification across various sectors and industries, reducing the impact of individual stock volatility. 

Microcap companies often have untapped opportunities for expansion, and early investment can lead to significant returns if these companies grow. Additionally, the free-float market capitalization-based weighting ensures the index reflects the real value of tradable shares. For investors seeking higher risk with the potential for higher returns, this index is a suitable option.

The Nifty Microcap 250 Index was introduced on 10 May 2021, to offer a benchmark for tracking the performance of microcap companies listed on the NSE. It was created to focus on smaller, high-growth companies that are not part of the larger Nifty 500 Index. 

The index includes the top 250 companies beyond the Nifty 500, providing investors with exposure to emerging businesses. By selecting stocks based on average market capitalization and liquidity, the index ensures that only actively traded microcap stocks are included. Over time, it has become a key tool for investors seeking to capture opportunities in India’s expanding microcap market.
 

To invest in Nifty Microcap 250 stocks, you can buy individual stocks listed in the index through a Demat account. Alternatively, you can invest in ETFs or index funds that track the Nifty Microcap 250 Index, offering a diversified and cost-effective way to gain exposure to top large-cap companies.
 

Nifty Microcap 250 stocks are the top 250 microcap companies listed on the NSE, selected based on their market capitalization and liquidity. These stocks represent smaller, emerging businesses not included in the Nifty 500 index.
 

Yes, you can trade shares of companies listed in the Nifty Microcap 250 Index through a Demat account. You can buy and sell these stocks during market hours like any other listed stock. Additionally, you can invest in ETFs or index funds based on the Nifty Microcap 250 Index for broader exposure.

The Nifty Microcap 250 Index was launched on May 10, 2021. It was introduced to track the performance of the top 250 microcap companies listed on the NSE, focusing on emerging businesses beyond the Nifty 500.
 

Yes, you can buy Nifty Microcap 250 stocks and sell them the next day, following the BTST (Buy Today, Sell Tomorrow) strategy. This allows you to take advantage of short-term price movements without waiting for the usual settlement period.