Nifty Microcap 250 Index

NSE Indices launches a new Index - Nifty Microcap 250 Index which aims to track the performance of microcap stocks listed or permitted to trade on NSE. The index includes the top 250 companies beyond the Nifty 500 index constituents, selected based on their average full market capitalization. A stock’s weight is based on its free-float market capitalization.

The following picture represents the NSE Indices structure for Nifty 500 companies. 

Though NSE has over 1800 companies traded on their exchange, the top 500 companies represent about 94% of the free float market capitalization of the stocks. In other words, if you buy the Nifty 500 index or an ETF, you are buying the entire Indian stock market.

Now, the Nifty Microcap 250 Index represents the stocks from 501 to 750, which are microcap companies.

Check out the Sector representation  and top constituents of this index:



How well the index has performed? The index has returned 14% CAGR over the last 5 years. 


So, the next obvious question would be whether there will be an index fund and if there were one, is it worth investing?

Index investing and Index products have just started to get the traction, and we have a long way to go before we seen an Index fund or an ETF for this index. We may probably see some few AMCs launching active funds benchmarking this index. 

As the economy and market evolves we may have more funds and ETFs from passive space for small cap (though we have few small cap index funds) and micro cap indices.