Nifty Smallcap 50

The Nifty Smallcap 50 is a broad-market index designed to capture the movement of selected companies from the small-cap segment. It contains 50 companies selected from the eligible universe of the Nifty Smallcap 250 Index. The current methodology selects companies based on six-month average free-float market capitalisation after applying the specified eligibility conditions.

The index uses the free-float market capitalisation method. This means the calculation considers the market value of shares available for public trading rather than the full shareholding of a company. A company's weight in the index depends on its eligible free-float market capitalisation.

The index is calculated in real time during market hours and can serve as an underlying index for index funds, ETFs and other investment products.

Nifty Smallcap 50 is an index that reflect companies chosen from small cap index fund India cap category. The stock selection process in this index is related to the universe of stocks eligible for inclusion in the Nifty Smallcap 250 index.

Under the current methodology, eligible securities are selected from the top 150 stocks based on average full market capitalisation or average daily turnover within the Nifty Smallcap 250 universe. Selection also considers the six-month average free-float market capitalisation.

The index contains 50 constituents and uses free-float market capitalisation-based weighting. This means companies with a larger eligible free-float market capitalisation generally have a higher weight in the index.

The Nifty Smallcap 50 uses the free-float market capitalisation method. In simple terms, the index value reflects the total free-float market value of its constituents relative to the index's base market capitalisation.

The basic calculation can be represented as:

Index Value = Current Free-Float Market Capitalisation ÷ Base Market Capitalisation × Base Index Value

Free-float market capitalisation considers the shares available for public trading after applying the relevant investability factor. The index divisor is adjusted for corporate actions and other changes so that such events do not cause artificial changes in the index level.

The Nifty Smallcap 50 is calculated in real time during market hours.

The following are key criteria used under the current methodology:

• Stocks must come from the Nifty Smallcap 250 universe.
• The eligible universe consists of companies ranked within the top 150 based on both six-month average daily full market capitalisation and average daily turnover.
• From this eligible universe, 50 stocks are selected based on higher six-month average free-float market capitalisation.
• For inclusion, a stock's free-float market capitalisation must meet the applicable ranking conditions.
• Existing constituents can remain subject to the applicable inclusion and exclusion rules.
• A non-member eligible stock may be considered for compulsory inclusion where its free-float market capitalisation is at least 1.5 times that of the smallest index constituent.

A maximum of 10 replacements can be made during a review.

The index is reviewed semi-annually, with changes effective in March and September.

The index value changes with movements in the prices and free-float market capitalisation of its 50 constituents. A company with a higher free-float market capitalisation generally carries a higher weight than a company with a lower free-float market capitalisation.

NSE Indices reviews the Nifty Smallcap 50 semi-annually, with changes becoming effective on the last working day of March and September. The methodology also specifies the data and ranking criteria used for constituent selection and exclusion.

This periodic review allows the index composition to reflect changes in the eligible small-cap universe.

The Nifty Smallcap 50 can offer certain portfolio characteristics, although its suitability depends on individual circumstances. 

• Focused Small-Cap Exposure: It tracks a selected group of small-cap companies. 
• Diversification Across 50 Companies: Exposure is spread across multiple constituents rather than a single company. 
• Rules-Based Selection: Constituents are selected according to defined index methodology. 
• Transparent Weighting: Free-float market capitalisation determines constituent weights. 
• Benchmarking: The index can be used to assess the performance of small-cap-oriented investment products. 

These features describe the structure of the index and do not indicate that it is suitable for every investor. 

The Nifty Smallcap 50 has a base date of 1 April 2005 and a base value of 1,000. It forms part of the Nifty broad-market index series. 

Small-cap companies may experience significant price movements, and the index carries a high level of market risk. 

Key risks include:

• Higher Volatility in Prices: It is possible for small cap stocks to see major price variations.
• Liquidity Risk: There might be some constituents in this index with less liquidity compared to that in case of large cap stocks.
• Business Risk: It is likely that smaller firms are more affected by changes in business environment.
• Concentration Risk: While there are 50 constituents in this index, it is relatively narrow compared to other small cap indexes.
• Market Risk: This index can go down due to market performance affecting small cap stocks.

Investors should consider these risks, along with their financial objectives and risk tolerance, before investing through an index fund or other market-linked product

The Nifty Smallcap 50 may be considered by investors seeking exposure to a selected basket of small-cap companies and who can tolerate substantial market fluctuations. 

It may be relevant for investors who: 

• Have a long investment horizon. 
• Understand small-cap equity risks. 
• Can tolerate high volatility. 
• Want focused exposure to the small-cap segment. 
• Are assessing index funds or other products tracking this index. 

Investors with short-term financial requirements or limited tolerance for equity-market fluctuations may need to assess whether this type of exposure aligns with their circumstances. 

Both indices carry substantial equity-market risk, and the broader constituent count of the Nifty Smallcap 250 does not eliminate market risk. 

The Nifty Smallcap 50 is an index rather than a directly purchasable security. Investors can obtain exposure through eligible investment products such as index funds that track the index, subject to availability.

They are the 50 securities that form the Nifty Smallcap 50 at a given review period. The constituent list can change according to NSE Indices' methodology.

The index itself cannot be bought or sold like an individual share. Investors can trade individual constituent stocks or invest through eligible products that track the index.

The index has a base date of 1 April 2005, with a base value of 1,000.  

The index itself cannot be directly bought or sold. Individual securities or eligible index-tracking products have their own trading and investment processes.

It is a broad-market index representing selected small-cap companies and comprises 50 constituents. Its constituents are weighted using free-float market capitalisation.  

Investors can explore index funds that seek to track the Nifty Smallcap 50. Before investing, they can review the fund's objective, tracking difference, costs, risk level and other scheme-related information.

The Nifty Smallcap 50 has 50 constituents, making it more focused, while the Nifty Smallcap 250 has 250 constituents and provides broader small-cap exposure.

The index uses the free-float market capitalisation method. The combined free-float market value of its constituents is used in the index calculation, with the divisor adjusted for relevant changes.

An index does not have a fixed level of safety. The Nifty Smallcap 50 represents small-cap companies, and investments linked to it are subject to equity market risks and price fluctuations.