Explained – Nifty Indices (Nifty50, Nifty Next 50, Nifty 500 & 12 Others)

 There are many popular indices in Indian stock markets. You already know Nifty50 and Sensex and you regularly lookup for Nifty live or Sensex live data. And you might be regularly looking at differences in Nifty Vs Sensex. But these aren’t the only indices as many of you already know.

There are several others as well – like Nifty100, Nifty Midcap 50, Nifty 500, etc. In fact, the NSE maintains around 15 broad market indices. These are:

1. Nifty 50
2. Nifty Next 50
3. Nifty 100
4. Nifty 200
5. Nifty 500
6. Nifty Midcap 50
7. Nifty Midcap 100
8. Nifty Midcap 150
9. Nifty Smallcap 50
10. Nifty Smallcap 100
11. Nifty Smallcap 250
12. Nifty LargeMidcap 250
13. Nifty MidSmallcap 400
14. Nifty Microcap 250 (launched in 2021)
15. Nifty500 Multicap 50:25:25

Wow! It can be confusing. And there are many more indices like the strategic ones. But let’s try to see how all the above-mentioned 15 indices are related to each other and fit into the broader index Nifty 500.

Below is shown the index hierarchy published by NSEas shown below:

Let’s try to understand the structure above:

NIFTY 500: This index sits at the top. It represents the top 500 companies based on full market capitalization from the eligible universe. In a way, you can say that it includes all the other 12 indices within itself.

NIFTY 100: This represents the top 100 companies (i.e. from 1 to 100) from within the NIFTY 500. This index basically tries to track the performance of companies having large market caps. Large cap funds invest predominantly in top 100 stocks of this index only/

NIFTY Midcap 150: This index represents the next 150 companies (i.e. companies ranked from 101 to 250) within the NIFTY 500. As is obvious, this index tries to measure the performance of mid-cap companies.

NIFTY Smallcap 250: This index represents the remaining 250 companies (ranked from 251 to 500) in the NIFTY 500. And you guessed it correctly; this index measures the performance of small-cap companies.

So as you see, the index Nifty 500 is basically made up of the following 3:

• (1 to 100) – Nifty 100
• (101 to 250) – Nifty Midcap 150
• (251 to 500) – Nifty Smallcap 250

Now, these 3 major indices themselves are made up of other individual indices.

The Nifty 100 has two parts:

• NIFTY 50: You already know this index. Right? This represents the first 50 companies from the NIFTY 100.matters, read this detailed analysis of Nifty PE and Future Returns (1999-2018)
• NIFTY Next 50: This includes the remaining 50 companies from NIFTY 100 after excluding the NIFTY 50 companies. That is the companies from 51 to 100.

The Nifty Midcap 150 has two parts too:

• NIFTY Midcap 50: This includes the top 50 companies from within the NIFTY Midcap 150 index.
• NIFTY Midcap 100: This includes all the companies from NIFTY Midcap 50 above. The remaining companies are selected based on average daily turnover from NIFTY Midcap 150 index.

The Nifty Smallcap 250 has the following two parts:

• NIFTY Smallcap 50: It represents the top 50 companies selected based on average daily turnover from the top 100 companies selected from the NIFTY Smallcap 250 index.
• NIFTY Smallcap 100: It includes all companies from NIFTY Smallcap 50. And the remaining companies are selected based on average daily turnover from the top 150 companies selected from NIFTY Smallcap 250 index.

So till now, you have seen that at the top of the index hierarchy is the all-encompassing Nifty 500. From that we have 3 indices derived – (i) Nifty 100 (which is made up of Nifty 50 and Nifty Next 50); (ii) Nifty Midcap 150 (which is itself made up of Nifty Midcap 50 and Nifty Midcap 100) and (iii) Nifty Smallcap 250 (which is itself made up of Nifty Smallcap 50 and Nifty Smallcap 100)

Let’s check the remaining ones

NIFTY 200: This is basically made up of companies belonging to Nifty 50, Nifty Next 50 (or call it NIFTY 100), and the NIFTY Midcap 100.

NIFTY LargeMidcap 250: This includes all companies from NIFTY 100 and NIFTY Midcap 150. It intends to measure the performance of the large and mid-market capitalization companies.

NIFTY MidSmallcap 400: This includes all companies from NIFTY Midcap 150 and NIFTY Smallcap 250. It intends to measure the performance of the mid and small-market capitalization companies.

NIFTY Microcap 250: This includes the top 250 companies beyond the Nifty 500 index constituents. That is, the Nifty Microcap 250 Index represents the stocks of microcap companies from 501 to 750.

NIFTY Multicap500 50:25:25: This index aims to measure the performance of a portfolio of large, mid, and small market capitalization companies with target weights assigned to each segment. The index will have 50% weight to Large-cap stocks (Nifty 100 stocks), 25% weight each to Midcap (Nifty Midcap 150 stocks) and Small-cap stocks (Nifty Smallcap 250 stocks) as on quarterly rebalance dates.

Sounds complex no doubt. But if you once again have a look at the image below again, it seems quite logical: