1W Return
▼-0.53%
1M Return
▼-7.31%
6M Return
▲14.74%
1Y Return
▲0.41%
3Y Return
▲97.04%
Open
8548.6
Prev. Close
8530.15
| Company | Market Cap | Market Price | Sector |
|---|---|---|---|
24,575.27 | 700.15 -24.95 (-3.44%)▼ | Trading | |
15,662.26 | 874.45 -29.80 (-3.30%)▼ | Pharmaceuticals | |
22,917.53 | 937.60 -28.60 (-2.96%)▼ | Realty | |
41,556.02 | 8,148.50 -190.50 (-2.28%)▼ | Financial Services | |
27,934.20 | 103.46 -2.32 (-2.19%)▼ | Infrastructure Developers & Operators |
What is Nifty Smallcap 50?
Nifty Smallcap 50 is a stock market index managed by the National Stock Exchange (NSE) of India, designed to track the performance of the top 50 companies in the small-cap segment. These companies are selected based on their free-float market capitalisation and liquidity from within the broader universe of small-cap stocks listed on the NSE. The index serves as a benchmark for investors, fund managers, and analysts interested in India’s emerging businesses with significant growth potential.
Launched to provide a transparent and representative gauge for the small-cap segment, Nifty Smallcap 50 captures the price movements and overall trends of promising, relatively smaller companies that may not be included in more prominent large-cap or mid-cap indices. The index offers a focused view of India’s entrepreneurial and innovative landscape, often reflecting higher volatility and growth prospects compared to large-cap peers. It is reviewed semi-annually to ensure it remains relevant and continues to represent the evolving small-cap sector.
Nifty Smallcap 50 stocks selection criteria
The selection process for Nifty Smallcap 50 is designed to ensure only the most representative and investable small-cap companies are included. The starting universe is the Nifty Smallcap 250 index, which comprises the top 250 small-cap companies ranked by average daily turnover and average free-float market capitalisation. From this pool, the top 50 companies with the highest average daily turnover over the last six months are selected to ensure liquidity. The companies must also have a minimum listing history, generally at least six months, to avoid including newly listed or highly volatile stocks.
Additionally, the index only includes companies that are available for trading in the Futures & Options (F&O) segment, further ensuring sufficient liquidity. The selection process emphasises diversification, limiting sectoral concentration so that no single sector overwhelmingly dominates the index. The index is reviewed and rebalanced semi-annually, during which additions or deletions are made based on the latest data on market capitalisation, trading activity, and liquidity.
How is the Nifty Smallcap 50 index calculated?
Nifty Smallcap 50 is calculated using the free-float market capitalisation-weighted method, a widely accepted approach for index calculation. In this method, each stock’s weight in the index is proportional to its free-float market capitalisation, which is calculated by multiplying the stock’s market price by the number of shares available for public trading (excluding promoter and locked-in shares). The index value is derived using the formula:
(Sum of free-float market capitalisation of all 50 constituent stocks / Index divisor) × Base value
The base date for the index is December 1, 2003, and the base value was set at 1000. The index divisor is periodically adjusted to account for changes such as stock splits, rights issues, bonus shares, and changes in the index constituents, ensuring consistency and comparability over time. The index is reviewed and rebalanced semi-annually to reflect the latest market dynamics. This calculation methodology ensures that Nifty Smallcap 50 accurately mirrors the performance of India’s top small-cap companies, providing a reliable tool for benchmarking and investment decision-making.
Nifty Smallcap 50 FAQs
How to invest in Nifty Smallcap 50?
You can invest in Nifty Smallcap 50 through mutual funds or Exchange Traded Funds (ETFs) that track the index. Open a demat and trading account with a registered broker, select a relevant small-cap fund or ETF, and invest your chosen amount either in lumpsum or through systematic investment plans.
What is the objective of Nifty Smallcap 50?
The main objective of Nifty Smallcap 50 is to provide a transparent and investable benchmark for tracking the performance of the most liquid and prominent small-cap companies in India, helping investors assess the growth potential of emerging businesses.
Factors that can impact performance of the Nifty Smallcap 50 index
Nifty Smallcap 50’s performance can be influenced by economic growth, interest rates, government policies, sectoral trends, global market movements, and investor sentiment. Small-cap stocks are especially sensitive to changes in liquidity and market cycles.
Is investment in Nifty Smallcap 50 safe?
Investment in Nifty Smallcap 50 offers high growth potential but comes with higher volatility and risk compared to large-cap indices. Small-cap stocks can be more sensitive to market downturns, so investors should carefully assess their risk tolerance.
Benefits of Investing in Nifty Smallcap 50
Investing in Nifty Smallcap 50 provides exposure to fast-growing, innovative companies, offering diversification beyond large established firms. It allows investors to tap into the potential of future market leaders and benefit from India’s expanding economy.