What is Nifty Midcap 150 – Returns and Stock List 2023

What is Nifty Midcap 150? 

Nifty Midcap 150 is an index on the NSE (National Stock Exchange) that represents 150 companies ranked 101^st to 250^th based on market capitalisation (₹5,000 crore to ₹20,000 crore). The index is focused on evaluating the performances of companies with mid-market capitalisation. Nifty Midcap 150 index mutual funds track and mirror the performance of the Nifty 150 index in a bid to offer returns that closely match the index.

Nifty Midcap 150 Index – At a Glance 

The table below provides a brief overview of the Nifty Midcap 150 index: 

How is the Nifty 150 Index Constructed? 

Nifty Midcap 150 index comprises 150 companies, ranked between 101^st and 250^th in the Nifty 500 index based on their full market capitalisation. To understand this further, let us explore the details of its rankings.

The first 50 companies listed on the Nifty 500 index are established industry leaders with large market capitalisation. These Nifty 50 companies comprise around 56% of the total market capitalisation of Nifty 500. The next Nifty 50 companies are businesses with maturing business models. These Nifty Next 50 companies hold 16.3% of Nifty 500’s total market capitalisation and are considered to be future superstars. 

The Nifty Midcap 150 companies have evolving business models. These companies are focussed players with a high growth rate and consist of 18.5% of the total market capitalisation of Nifty 500f. As of February 06, 2023, the total market cap of Nifty Midcap 150 is ₹44,58,327.03 crore.

After this, there are the Nifty Small cap 250 companies which are characterised by unproven business models. These are niche players which hold 8.6% of the Nifty 500’s total capitalisation. 

Given below in points are some of the important features:

• The average daily traded value of large-cap companies is double that of mid-cap companies, which in turn is double that of small-cap companies. 
• The promoters of mid-cap companies hold 60% of shares and only two-fifths of the shares are available as free float. 
• Financial analysts have analysed the performances of mid-cap companies and discovered an interesting point. Over the previous 5 years, the average constituent grew its revenue by 8.7%. Moreover, it increased its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) by 12.5%, EPS (Earnings Per Share) by 13.7% and stock price by 13.3%.

What is the Nifty Midcap 150 Methodology? 

The methodology adopted for computing this index is called the free float market capitalisation method. The underlying concept of this methodology is that the index level shows the free float market value of every stock it holds with respect to its base market capitalisation value. 

As per the free float market capitalisation methodology, a company’s market capitalisation is calculated by taking into account only those free shares that are being actively traded in the open market. It excludes locked-in shares reserved for debt borrowers, and shareholding by founders, promoters, directors or partners. Shares held by hedge funds, private equity funds, mutual funds and equities held by cross-holdings and other trusts etc., are also excluded.

Free float market capitalisation is also referred to as float-adjusted capitalisation. An important point to remember is that the market capitalisation calculated using the free float market capitalisation methodology will always be less than the one calculated using the full capitalisation method.

Formula for Calculating Free Float Market Capitalisation:

Free float market cap = Current market price x (total number of shares – locked shares)

Let us understand this further with the help of an example. Provided below are the details of ABC Company: 

• Outstanding shares – 35,000 shares
• Promoter holding – 5,000 shares
• Strategic holding – 1,000 shares
• Locked shares with shareholders – 2,000 shares 

The current market price is ₹50 per share. First, we need to calculate the market capitalisation and free float market capitalisation. The formula for calculating market capitalisation is as follows: 

Market capitalization = total number of shares x current market price

So, ₹50 x 35,000 = ₹17,50,000

To calculate free-float market capitalisation, we need to follow these steps: 

Number of shares unavailable for trading = Promoter Holding + Locked shares with Shareholders + Strategic Holding

So, the number of shares unavailable for trading is (5,000 + 2,000 + 1,000) = 8,000 shares 

Therefore, free-float market capitalisation = ₹50 x (35,000 – 8,000)

 = ₹50 x 27,000 = ₹13,50,000 

Eligibility Criteria for Selection of Constituent Stocks/Companies

Take a look at the eligibility criteria for getting included in this index: 

• Companies need to be a part of the Nifty 500 index to be eligible. 
• A stock will be included if the company ranks among the top 225 companies based on its market capitalisation.
• Inclusion of securities will also take place if the full market capitalisation of the company is at least 1.5 times of the previous constituent in the NSE Midcap 150.
• Data for 3 months, instead of 6 months, will be assessed and based on the results, a newly listed security will be deemed eligible.
• If the company’s rank based on its full market capitalisation falls below 275 or if the constituent is excluded from Nifty 500, its securities will get excluded.
• The stock’s Investable Weight Factor must be a minimum of 0.10, i.e. 10% free-float. But if that is not possible, then the stock’s 6 months average free float market cap needs to be a minimum of 25% of the 6-month average full market cap of the smallest index constituent that existed before the index review.

What are the Top 20 Companies Listed on Nifty 150 Midcap? 

The table below provides the list of the top 20 stocks on Nifty 150 Midcap along with their index weight:

What is the Weightage of Different Sectors in Nifty 150 Midcap? 

This index comprises stocks of companies from a wide range of sectors. The table below represents a sector-wise representation of companies listed on the Nifty Midcap 150: 

Performance of Nifty Midcap Index 150 over Time

Equity investments are always subject to market movements and Nifty Midcap 150 investment is no different. However, it has been seen that the index delivers good returns over long investment tenure. 

In fact, the index has been able to generate 16.5% as average annual returns over the previous 15 years. If we have to elaborate in simpler words, suppose you have invested ₹10,000 every month in this index for 15 years. By March 2022, you would have been able to build a corpus of ₹78 lakh. 

The average annual returns generated by Nifty 150 Midcap companies for the previous 15 years have exceeded 15%. This is more than the 14% generated by the average midcap funds over the same period. 

To further elaborate, financial experts minutely compared the returns generated by actively managed mid-cap funds and that delivered by the index. It was quite evident that most midcap funds had failed to match the returns generated by the underlying index, i.e. the Nifty Midcap 150 has successfully delivered higher returns than most midcap mutual funds. 

You can consider investing in stocks of Nifty 150 Midcap through index funds and ETFs (Exchange Traded Funds) that aim to replicate this index. 

What Is the Difference between Nifty Midcap 100 and Midcap 150? 

The table shows the main difference between these 2 index as follows: 

What Is the Difference between Nifty Midcap 50 and Midcap 150? 

The following table provides the main difference between these 2 index: 

How to Invest in Nifty Midcap 150 Index? 

You can invest in Nifty Midcap 150 index fund via AMC or a third-party aggregator to capture the potential of the Nifty Midcap 150 index.  

Investing Via AMC

• Step 1: Go to the official website of AMC or download their app
• Step 2: From the mutual fund section, select a index fund on the basis of expense ratio, tracking error, etc. 
• Step 3: Complete your KYC and start investing via SIP or in lump sum 

Investing Via Aggregator

• Step 1: Go to the aggregator’s website or download their app
• Step 2: Select a index fund based on cost, tracking error, etc.
• Step 3: Complete your KYC and start investing

Final Word 

Since Nifty Midcap 150 index funds track the performance of the underlying index – Nifty Midcap 150 index – investing in such funds could help you benefit from the rapid growth of mid-cap companies. Note that these companies hold the potential of becoming market leaders in their own segment in the future. 

You can also consider investing in the Nifty Midcap 150 Index Fund with Navi Mutual Fund. This scheme lets you capture the performance of 150 midcap companies at a lower cost. If you’re just starting out investing in the equity market, you can also choose to start small. With Navi Mutual Fund, you can start investing with as low as ₹10!

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