The Nifty MidSmallcap 400 Index tracks the performance of mid cap and small cap companies listed on the National Stock Exchange of India. It reflects the aggregate movement of share prices of these companies based on their free float market capitalisation.
Features of Nifty MidSmallcap 400 Index
Opportunities from growing businesses – Index constituents operate in expanding industries and may be in earlier stages of business development compared to large cap firms.
Diversification across company sizes – The index includes a diversified basket of mid cap and small cap companies, reducing concentration risk.
Exposure to evolving sectors – Many constituents operate in growing sectors such as manufacturing, speciality chemicals, technology services, and niche consumer segments.
Suitable for long-term investors – Investments in mid cap and small cap companies offer the potential to build wealth in the long term.
How does the Nifty MidSmallcap 400 Index work?
Companies are weighted according to their free float-market capitalisation. The index is reviewed periodically to reflect changes in market capitalisation, liquidity, and constituent eligibility.
Companies included in the Nifty MidSmallcap 400 Index
The selection of stocks follows a structured methodology to ensure liquidity, investability, and market representation.
Combination of two indices
The index is formed by combining all companies that are part of the Nifty Midcap 150 Index and the Nifty Smallcap 250 Index, resulting in a total of 400 stocks representing mid sized and small sized companies.
Market capitalisation ranking
Only companies with sufficient free-float (shares available for public trading) are considered. Weightage in the index is assigned using the free-float market capitalisation method.
Liquidity criteria
Stocks must meet minimum liquidity requirements, such as average daily trading volume and turnover thresholds, to ensure ease of trading.
Listing history
Companies must have a minimum listing track record on the NSE, unless they are newly listed and meet fast-track eligibility norms.
Periodic review and rebalancing
The index is reviewed semi-annually. During this process, eligible companies may be added or removed based on updated market capitalisation rankings and liquidity conditions.
Automatic inclusion and exclusion
Any addition or removal of a stock from either the Nifty Midcap 150 or the Nifty Smallcap 250 is reflected in the Nifty MidSmallcap 400 Index, keeping it aligned with its underlying indices.
Consistency and transparency
Because the index relies on established methodologies, its construction remains rules based and transparent.
Sector allocation in the Nifty MidSmallcap 400 Index
As of April 2026, the index comprises companies from financial services, healthcare, consumer services, information technology, capital goods and much more. The financial services sector accounts for the highest share. Sector weights vary over time due to price changes, constituent updates, and periodic reviews. No sector allocation should be assumed to remain constant or predictive of future performance.
How to invest in the Nifty MidSmallcap 400 Index?
The Nifty MidSmallcap 400 Index is not directly investable. Investors cannot purchase the index itself, and there are currently no index funds or ETFs designed to replicate it.
To gain exposure similar to the index, an investor would need to buy the individual constituent stocks in their respective weights. However, replicating all 400 stocks may be complex, capital-intensive, and difficult to maintain due to periodic rebalancing.
As a result, investors typically use the index as a benchmark or market indicator rather than as a direct investment avenue.
Benefits of Nifty MidSmallcap 400 Index
- Exposure to mid cap and small cap companies through a single diversified index structure.
- Broad diversification across a large number of stocks and sectors.
- Access to evolving industries represented within the mid cap and small cap segments.
- Alignment with long investment horizons due to higher volatility characteristics.
FAQs
What is the Nifty MidSmallcap 400 Index and how is it calculated?
It measures the performance of mid cap and small cap companies using the free float market capitalisation method, considering only tradable shares and expressing their combined market value relative to a base period.
How is the Nifty MidSmallcap 400 different from the Nifty Midcap 150?
The Nifty Midcap 150 includes only mid cap stocks, whereas the Nifty MidSmallcap 400 combines both mid cap and small cap companies.
Which companies are part of the Nifty MidSmallcap 400 Index?
The index contains 400 companies drawn from the Nifty Midcap 150 and Nifty Smallcap 250. The constituent list changes during periodic reviews.
Can investors invest directly in the Nifty MidSmallcap 400 Index?
No. Investors cannot invest in the index directly. As of now, there are no index funds or ETFs tracking the Nifty MidSmallcap 400. If such products are introduced in the future, investors may access the index through them. Alternatively, exposure can only be created by purchasing the individual stocks that constitute the index, which may be operationally complex and capital-intensive.
