Nifty Smallcap 100

The Nifty midcap 100 index reflects the midcap segment of the share market. The index includes 100 tradable stocks listed on the NSE. The free float market capitalisation method becomes compatible with computing this index. 
The Nifty midcap 100 index launched on July 18, 2005. It can be used for various purposes, including benchmarking fund portfolios and launching ETFs, structured products, and index funds. While the calculation of the index is in real-time, the Nifty midcap 100 is rebalanced semi-annually. 
 

The Nifty Smallcap 100 Index is a benchmark index that tracks the performance of the top 100 companies from the small-cap segment listed on the NSE. These companies typically have lower market capitalizations compared to mid-cap and large-cap firms, offering higher growth potential but also greater risk and volatility. 

The index is designed to measure the performance of small-cap stocks, which are generally characterised by their emerging status and potential for substantial returns. Investors often use the Nifty Smallcap 100 as a barometer for the overall health of the small-cap segment in the Indian equity market. The index is reconstituted semi-annually to reflect changes in the market, ensuring that it remains representative of the small-cap sector.

The formula to compound the Nifty midcap 100 is as follows:

Free float market capitalisation= Investable Weight Factor (IWF) x Price x Shares Outstanding

You will be able to calculate the index value using this formula:

Index Value= Free float market capitalisation current rate/ Free float market capitalisation of the base index x Base value of the index

The investable weight factor refers to the number of shares accessible for the public to trade generally. These shares are not held by entities or groups with a strategic or a controlling interest in the organisation. When the IWF is high, the proportion of the shares held by the investors under the public category is also high.

The base index value refers to an arbitrary number that indicates the original value of the index. In the case of the Nifty midcap 100 stocks list, the base value of the index is 1000.  
 

To make it under the Nifty midcap 100 stocks list 2023, the following eligibility criteria need to be fulfilled:

●    The equity shares of the company must be on the NSC to be qualifying for the Nifty midcap 100 stocks list.
●    Instruments offering a fixed return, like bonds, preferred stock, convertible stock, warrants, and rights, cannot be included under the index. 
●    Equities with differential voting rights can be included under the index when they fulfil the other eligibility criteria. 
●    The companies must be a part of the Nifty 500 to qualify under the Nifty midcap.
●    The eligibility criteria for any equity that has been newly listed is evaluated on the basis of data collected over a three-month period.
●    To develop a better understanding of the Nifty midcap 100 index, it’s important to get knowledge about the constituents of the Nifty 150 index. This index contains the 150 companies included under the Nifty 500 index, ranking between 101 and 250 according to free float market capitalisation. 

The Nifty midcap 100 index contains the top 50 companies according to full market capitalisation under the Nifty Midcap 150 index. The remaining 50 companies are selected from Nifty 150, too but depending on the average daily turnover. 

The securities are added when the average daily turnover does not go beyond the top 70 constituents. But companies won’t be selected if the average daily turnover is lower than 130 among the index constituents.  
 

The Nifty Smallcap 100 Index operates by tracking the performance of the top 100 small-cap companies listed on NSE. These companies are selected based on their market capitalization, ensuring they represent the small-cap segment. The index is weighted by free-float market capitalization, meaning that the weight of each stock in the index is proportional to its market value, adjusted for shares that are available for public trading.

The index is rebalanced semi-annually to reflect the latest market conditions, allowing it to accurately represent the small-cap segment. Stocks may be added or removed based on their market capitalization and liquidity. Investors use the Nifty Smallcap 100 to gauge the performance of small-cap stocks in India, making it a useful tool for assessing investment opportunities in emerging companies with high growth potential but also higher risk.
 

Investing in the Nifty Smallcap 100 Index offers several benefits, especially for those seeking high growth potential. Small-cap companies, which make up this index, are often in the early stages of development and expansion, providing opportunities for significant capital appreciation as these companies grow. The index allows investors to gain exposure to a diversified portfolio of 100 small-cap stocks, reducing the risk associated with investing in individual small-cap companies.

Additionally, small-cap stocks tend to outperform large-cap stocks during economic recoveries or bullish markets, offering higher returns when the market is favourable. The Nifty Smallcap 100 also provides an accessible way for investors to tap into India's emerging companies, which may evolve into mid-cap or even large-cap companies over time, potentially delivering substantial long-term gains.
 

The Nifty Smallcap 100 Index was introduced by the National Stock Exchange (NSE) of India to provide a benchmark for the performance of the small-cap segment in the Indian equity market. Launched on July 18, 2005, the index was created to track the top 100 small-cap companies by market capitalization listed on the NSE.

The index’s inception coincided with a period of rapid growth in the Indian economy, where small-cap companies began gaining attention for their potential to deliver high returns. Over the years, the Nifty Smallcap 100 has experienced significant volatility, reflecting the inherent risks and opportunities in small-cap investing. Despite this volatility, the index has become a key indicator for investors looking to capitalise on the growth prospects of emerging companies in India. The index is rebalanced semi-annually to ensure it remains representative of the small-cap sector.

You can invest in Nifty Smallcap 100 stocks by purchasing individual stocks directly through a 5paisa demat account or by investing in index funds or exchange-traded funds that track the Nifty Smallcap 100 Index.
 

Nifty Smallcap 100 stocks are the top 100 companies with small market capitalizations listed on the National Stock Exchange, representing the small-cap segment of the market with higher growth potential and risk.
 

Yes, you can trade shares of companies listed in the Nifty Smallcap 100 Index through any brokerage platform. These stocks are available for buying and selling on the National Stock Exchange.
 

The Nifty Smallcap 100 Index was launched on July 18, 2005, by the National Stock Exchange to track the performance of the top 100 small-cap companies listed on the exchange.
 

Yes, you can buy shares of companies in the Nifty Smallcap 100 Index today and sell them tomorrow. This is called BTST trading, and it’s possible through the 5paisa platform.