What is Nifty Midcap Index – Features, Types and Risks in 2023

What is the Nifty Midcap Index?

The Nifty Midcap index is a stock market index listed on the NSE (National Stock Exchange) comprising stocks of Indian companies ranked between 101 and 250 based on market capitalisation of ₹5,000 crore and ₹20,000 crore. The most popular Nifty Midcap indexes are Nifty Midcap 50, Nifty Midcap 100 and Nifty Midcap 150.

Mid-cap indices provide a benchmark for investors looking to invest in mid-sized companies and are used to measure the performance of mid-cap stocks relative to the broader stock market. Funds that track the performance of Nifty Midcap index to provide returns that closely match the midcap index are known as Nifty Midcap index funds. 

In this blog, we have decoded the working of different types of Nifty Midcap index. Let’s dive in! 

What are the Features of the Nifty Midcap Index? 

Listed below are some of the features of Nifty Midcap Index:

1. Represents the Mid-cap Segment

The Nifty Mid Cap index features companies from the mid cap segment and provides a benchmark for mid cap stocks. These companies have the potential to become large-cap companies in the future, hence there’s a lot of potential in terms of growth.

2. Diversification

The index provides exposure to a diverse range of mid-cap stocks across various sectors. This seemingly helps in reducing the risk associated with investing in individual stocks. Hence, funds that track the Nifty )NSE) Mid-cap index are known to provide risk-adjusted returns in the long term.

3. Benchmark for Investors

Mid-cap indices provide a useful benchmark for investors willing to invest in mid-sized companies. The index helps in measuring the performance of mid-cap stocks relative to the broader stock market. 

4. Growth Potential

Mid-cap companies are often considered to have higher growth potential compared to large-cap companies. This makes mid-cap indices an attractive investment option for those seeking higher returns.

5. Risk

While mid-cap indexes offer higher growth potential compared to large-cap companies, they also come with higher risk. However, this risk could be mitigated if you stay invested for the long term and keep your portfolio diversified.

What are the Different Types of Nifty Midcap Index?

1. Nifty Midcap 50 Index

The Nifty Midcap 50 includes top 50 companies from the mid cap segment based on full market capitalisation. These companies are a part of the broader Nifty Midcap 150 index. The 

index represents about 6% of the free-float market capitalisation of the stocks listed on NSE as on March 29, 2019.

2. Nifty Midcap 100 Index

The Nifty Midcap 100 index is a stock market index that comprises companies ranked 101 – 200 based on market cap. The index is a part of the broader Nifty Midcap 150 index. The Nifty Midcap 100 index provides a benchmark for the mid-cap segment of the Indian stock market and offers exposure to a diverse range of mid-sized companies across various sectors.

3. Nifty Midcap 150 Index

The Nifty Midcap 150 index fund comprises companies listed on the NSE ranked between 101 and 250 based on market capitalisation of ₹5,000 crore to ₹20,000 crore. The index provides investors exposure to diverse sectors. Some of the companies listed have the potential to become large-cap companies in the future – one of the reasons why this index holds a tremendous growth potential.

What is the Difference Between Nifty Midcap 50, Nifty Midcap 100 and Nifty Midcap 150?

Refer to the table below to understand the difference between Nifty Midcap 50, Nifty Midcap 100 and Nifty Midcap 150.

What are the Top 10 Stocks in the Nifty Midcap 50 Index Based on Weightage?

The top 10 stocks of Nifty Midcap 50 are based on their weightage. This weightage could change every month. However, checking the list of stocks could give you a fair idea of the companies present in the index. Here are the details:

What are the Top 10 Stocks in the Nifty Midcap 100 Index Based on Weightage?

The top 10 stocks of Nifty Midcap 100 are based on their weightage. Checking the list of stocks could give you a fair idea of the companies present in the index. Here are the details:

What are the Top 10 Stocks in the Nifty Midcap 150 Index Based on Weightage?

The top 10 stocks of Nifty Midcap 150 are based on their weightage. This list can change based on various factors. However, checking the list of stocks could give you a fair idea of the companies present in the index. Here are the details:

Weightage of Different Sectors in Nifty Midcap 50, Nifty Midcap 100 and Nifty Midcap 150

The NSE Midcap index Is computed using free float market capitalisation method, wherein the level of the index reflects the total free float market value of all the stocks in the index relative to particular base market capitalisation value. Let’s check out the sector-wise representation of Nifty Midcap 50, Nifty Midcap 100 and Nifty Midcap 150.

How to Invest in Nifty Midcap?

You can invest in Nifty Midcap indexes via midcap mutual funds. For example, if you’re investing in a Nifty Midcap 100 index fund, the fund would mirror the performance of the Nifty Midcap 100 index to give you returns that closely match the performance of the index. The return depends on the performance of the index subject to tracking error.

Here are the ways you can invest in Nifty Midcap index funds:

1. Investing Through AMC’s Website

• Visit the official website of the AMC
• Fill in the required details
• Provide your Aadhaar card and PAN card details and complete the e-KYC
• Start investing

2. Investing Through a Mobile Application

• Download the mobile application
• Provide your contact details to register
• Complete the e-KYC process
• Start investing

Alternatively, you can also invest offline – here’s the step-by-step process:

• Step 1: Contact a representative of the fund house or an empaneled distributor.
• Step 2: Procure application and KYC form (if KYC procedure not completed) from the fund house’s website.
• Step 3: Fill the application/KYC (if applicable) form, provide necessary information i.e. name, address, PAN, email address, mobile number, etc. This email address and mobile number will be used for further communication, and can also be used to register for online transaction services.
• Step 4: Attach copies of relevant documents and submit them along with a cheque or demand draft of the desired investment amount.
• Step 5: Submit duly signed application/KYC (if applicable) form(s), with the cheque and all relevant documents, to any branch of the fund house or point of acceptance.
• Step 6: The fund house will then allocate and provide you a folio number for that particular investment. You will also receive an Account Statement, after the transaction is processed.

What are the Risks Associated with Nifty Midcap Index?

Potential risks of the Nifty Midcap Index could be:

1. Company Specific Risks

Midcap companies may have limited financial resources, untested management teams, and untested business models, which can result in higher company-specific risk.

2. Market-linked Risks

Midcap stocks can be more volatile than large-cap stocks and may experience larger price swings in response to market events.

3. Sector Risks

Midcap stocks can be heavily concentrated in specific sectors, which can result in higher sector-specific risk.

Final Word

Nifty Midcap index funds give investors the opportunity to capture the potential growth of mid-sized companies. However, note that investing in funds that track the Nifty midcap index are suitable for investors who have moderate to high-risk appetite. So, consider your investment goals and risk tolerance before investing in such schemes.

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