BAJAJ FINSERV ASSET MANAGEMENT LIMITED.
The Nifty Smallcap 50 Index measures the performance of 50 companies selected from the Nifty Smallcap 250 based on six-month average free-float market capitalisation, liquidity and trading frequency criteria. The index follows the free-float market capitalisation methodology and is reviewed periodically as per NSE Indices’ framework.
Includes 50 companies chosen from the Nifty Smallcap 250 based on defined market capitalisation and liquidity criteria.
Uses six-month average free-float market capitalisation and trading frequency filters for inclusion.
Follows a free-float market capitalisation methodology based on publicly available shares.
Provides exposure to companies across sectors such as financial services, healthcare, chemicals and capital goods.
The Nifty Smallcap 50 Index measures the performance of 50 relatively liquid companies drawn from the Nifty Smallcap 250 universe. Companies are selected based on six-month average free-float market capitalisation and liquidity criteria. The index follows a free-float market capitalisation methodology and is reviewed periodically as per NSE Indices framework.
The Nifty Smallcap 50 PRI reflects the price performance of 50 selected small cap companies drawn from the Nifty Smallcap 250. In contrast, the BSE 250 SmallCap TRI covers 250 small cap stocks and includes reinvested dividends, thereby reflecting total return rather than price-only movement. Bajaj Finserv Small Cap Fund uses the BSE 250 SmallCap TRI as its benchmark for performance evaluation.
Nifty Smallcap 50 PRI tracks price changes only, while BSE 250 SmallCap TRI reflects both price movement and dividend reinvestment.
Nifty Smallcap 50 PRI includes 50 companies selected from the Nifty Smallcap 250, whereas BSE 250 SmallCap TRI covers 250 small cap companies.
The PRI version excludes dividend income, while the TRI version assumes dividends are reinvested in the index.
3-In-1 Strategy
Seeks to invest in quality businesses that are growth-oriented and available at favourable valuations.
Quality Focus
Emphasises companies with healthy core metrics such as consistent earnings and sustainable competitive strengths.
Growth Orientation
Focuses on businesses with long-term growth potential supported by scalable and sustainable models.
Active Management
Portfolio is actively monitored and rebalanced through a research-driven investment approach.
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The Nifty Smallcap 50 Index is designed to capture the performance of 50 relatively liquid small cap companies selected from the broader Nifty Smallcap 250 universe, as defined by NSE Indices. It represents a focused segment within the small cap category of the Indian equity market.
The index selects companies based on six-month average free-float market capitalisation, subject to liquidity and trading frequency criteria prescribed in the NSE methodology. It follows the free-float market capitalisation weighted approach, which means stocks with a higher publicly available market value receive a higher weight in the index.
The Nifty Smallcap 50 Index was launched on 1 April 2016, with a base date of 1 April 2005 and a base value of 1000. It is calculated on a real-time basis, and like all equity indices, its performance reflects market movements and may vary across different market cycles.
The Nifty Smallcap 50 Index selects 50 companies from the Nifty Smallcap 250 based on six-month average free-float market capitalisation, subject to liquidity and trading frequency criteria defined by NSE Indices.
Each stock is weighted using the free-float market capitalisation methodology, meaning companies with a higher publicly available market value receive a higher weight.
The index is reviewed semi-annually in line with NSE’s reconstitution schedule, and any changes are implemented as per the prescribed framework. It is calculated on a real-time basis, reflecting ongoing market price movements.
The Nifty Smallcap 50 Index draws its constituents from the Nifty Smallcap 250 universe. To be eligible, companies must first form part of this broader small cap universe as defined by NSE Indices. From this pool, 50 companies are selected based on six-month average free-float market capitalisation, subject to liquidity and trading frequency criteria prescribed in the methodology document.
The index is reviewed semi-annually, and changes are implemented in line with NSE’s reconstitution framework.
Here are the latest sector representation and top constituents by weightage as per the March 30, 2026 factsheet:
Sector representation
| Sector | Weight (%) |
| Financial Services | 39 |
| Healthcare | 18.63 |
| Chemicals | 6.85 |
| Consumer Durables | 5.88 |
| Services | 5.71 |
| Automobile and Auto Components | 4.84 |
| Capital Goods | 4.65 |
| Oil, Gas & Consumable Fuels | 4.24 |
| Information Technology | 2.91 |
| Power | 2.49 |
| Metals & Mining | 2.42 |
| Construction | 2.38 |
Top constituents by weightage
| Company Name | Weight (%) |
| Karur Vysya Bank Ltd. | 4.44 |
| Delhivery Ltd. | 3.78 |
| Navin Fluorine International Ltd. | 3.68 |
| Piramal Finance Ltd. | 3.58 |
| Sona BLW Precision Forgings Ltd. | 3.51 |
| Central Depository Services (India) Ltd. | 3.24 |
| RBL Bank Ltd. | 2.84 |
| City Union Bank Ltd. | 2.81 |
| Aster DM Healthcare Ltd. | 2.76 |
| Computer Age Management Services Ltd. | 2.44 |
Source: Nifty Smallcap 50 Index Factsheet (March 30, 2026) and NSE Indices Methodology Document (March 2026); data is subject to change as per periodic review.
Both indices represent exposure to the small cap segment of the Indian equity market, but they differ in terms of coverage and return representation. Here is a structured comparison to help you understand these differences clearly:
| Basis Of Comparison | Nifty Smallcap 50 Index | BSE 250 SmallCap TRI |
| Universe Base | Derived from the Nifty Smallcap 250 universe defined by NSE Indices | Derived from the BSE small cap universe as defined by BSE Indices |
| Number Of Stocks | 50 companies | 250 companies |
| Selection Approach | Selected based on six-month average free-float market capitalisation, subject to liquidity and trading frequency criteria | Selected based on BSE’s small cap classification and index eligibility framework |
| Weighting Method | Free-float market capitalisation weighted | Free-float market capitalisation weighted |
| Market Coverage | Focused representation of relatively liquid small cap stocks | Broader representation of the small cap segment |
| Return Variant | Commonly referenced as a Price Return Index (PRI) | Total Return Index (TRI), which includes reinvested dividends |
| Review & Rebalancing | Reviewed semi-annually as per NSE methodology | Reconstituted and rebalanced as per BSE Indices’ prescribed schedule |
Understanding how the index is designed can help you evaluate the type of small cap exposure it provides within a structured framework:
Focused Representation
Captures the performance of 50 relatively liquid small cap companies selected from the broader Nifty Smallcap 250 universe.
Defined Eligibility Criteria
Companies are selected based on six-month average free-float market capitalisation, subject to prescribed liquidity and trading frequency requirements.
Free-Float Market Capitalisation Weighting
Each stock’s weight reflects its publicly available market value, ensuring the index represents investable market capitalisation.
Transparent Methodology
Follows a clearly defined and publicly available selection, review and rebalancing framework laid out by NSE Indices.
Periodic Reconstitution
Undergoes semi-annual review to ensure that constituents continue to meet the prescribed eligibility norms.
Market-Linked Performance
Reflects real-time price movements of its constituents and may vary with changes in market conditions.
Before considering exposure to this index, it is important to understand the risks that arise from its small cap focus and equity market participation:
Equity Market Risk
As an equity index, its performance is directly influenced by overall market movements, economic conditions and changes in corporate earnings.
Small Cap Volatility
Small cap companies may experience sharper price fluctuations compared to large cap stocks, especially during uncertain market phases.
Liquidity Risk
Although constituents are selected using liquidity criteria, trading volumes in small cap stocks may still be lower than in larger companies during stressed conditions.
Concentration Risk
With only 50 stocks, price movements in a few constituents can have a noticeable impact on overall index performance.
Reconstitution Impact
Periodic semi-annual reviews may lead to changes in constituents, which can alter sector weights and stock representation over time.
If you are evaluating this index, it is useful to think about your investment time frame and how you approach market fluctuations:
You cannot invest directly in the Nifty Smallcap 50 Index, but you can access it through investment products that are designed to track its performance:
Before investing, it is important to read the scheme-related documents carefully and ensure that the investment fits within your broader asset allocation strategy, keeping in mind that returns are subject to market risks.
The BSE 250 SmallCap TRI serves as the benchmark for Bajaj Finserv Small Cap Fund and acts as a comparative yardstick for evaluating how the portfolio performs over time. Because the TRI version factors in reinvested dividends along with price changes, it reflects total return performance of the broader small cap segment.
That said, the fund is not structured to mirror the benchmark. It follows an active investment strategy and builds its portfolio through independent stock selection within the small cap universe, which can lead to differences in holdings, sector exposure and weight distribution when compared with the index.
In essence, while the benchmark provides a reference for performance measurement, the portfolio construction is guided by the scheme’s investment objective and research-led framework. For detailed scheme information, click here.
The Nifty Smallcap 50 Index tracks the performance of 50 companies selected from the Nifty Smallcap 250 universe. Selection is based on six-month average free-float market capitalisation, subject to liquidity and trading frequency criteria defined by NSE Indices. The index follows the free-float market capitalisation weighted methodology and is calculated on a real-time basis.
The Nifty Smallcap 50 Index includes 50 companies selected from the Nifty Smallcap 250 and is commonly referenced as a Price Return Index (PRI), which reflects price movements only. The BSE 250 SmallCap TRI includes 250 small cap companies and reflects total return, including reinvested dividends. Both indices follow free-float market capitalisation weighting but differ in coverage and return representation.
The index includes 50 companies drawn from the Nifty Smallcap 250 universe. Companies are selected based on six-month average free-float market capitalisation and must meet NSE’s prescribed liquidity and trading frequency requirements. The constituent list is reviewed semi-annually in line with the index reconstitution schedule.
Investors cannot invest directly in the index. Exposure may be obtained through index funds or exchange-traded funds (ETFs) that aim to replicate the index composition, subject to tracking error.
The Nifty Smallcap 50 represents the small cap segment of the equity market. As small cap stocks may experience higher price volatility compared to large cap stocks, investors evaluating this index should consider their investment horizon and overall asset allocation strategy.
The Nifty Smallcap 50 is an equity index and is subject to market risks. Because it focuses on small cap companies, price movements may be sharper compared to indices dominated by larger firms, and returns are not guaranteed.
Risks include equity market volatility, higher price fluctuations associated with small cap stocks, liquidity considerations during stressed market conditions, and tracking error in funds that seek to replicate the index. Since the index contains 50 stocks, movements in individual constituents may influence overall returns.
The calculator alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. This tool is created to explain basic financial / investment related concepts to investors. The tool is created for helping the investor take an informed investment decision and is not an investment process in itself. Bajaj Finserv AMC has tied up with AdvisorKhoj for integrating the calculator to the website. Mutual Fund does not provide guaranteed returns. Also, there is no assurance about the accuracy of the calculator. Past performance may or may not be sustained in future, and the same may not provide a basis for comparison with other investments. Investors are advised to seek professional advice from financial, tax and legal advisor before investing in mutual funds.
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Bajaj Finserv Limited, an unregistered Core Investment Company (CIC) under RBI Regulations 2020, is a part of the renowned Bajaj Group.
One of India’s leading and most diversified financial services institutions, Bajaj Finserv Ltd provides simple financial solutions to crores of people every day through its group companies. Through continuous innovation, it strives to enrich the lives of communities across the length and breadth of the country and make financial security accessible to all.
Our Investment Philosophy reflects what we, as an organisation, believe will generate a good return on equity investment for our investors in the long term. It dictates our goals and guides decision making.
Alpha (a) is a term used in investing to describe an investment strategy’s ability to beat the market.
Alpha is thus also often referred to as excess return or the abnormal rate of return in relation to a benchmark, when adjusted for risk. Essentially, it means doing better than the crowd without taking disproportionate risk.
Collecting superior information
Analysts and portfolio managers strive to collect superior information about the business and the management of the company. They try to generate superior earnings forecast and the balance strength of the company and the industry, thereby trying to 'beat the market' on information edge. This is an important source of alpha for an investor. However, over the years, retaining the information edge has become more difficult and expensive. With a whole lot of investors trying to collect superior information, how can an investor be sure to continuously have accurate and material information about the companies, ahead of others, all the time?
Processing information better
Even if you don't have material information earlier than the crowd, you can still generate better outcomes if you are able to process this information better. Investors develop models and algorithms with enhanced predictive powers to forecast the next move. Fund managers who invest based on some pure formal analytical models are quantitative managers. Here, the goal is to try and beat other investors based on the sophistication of procedures or analytics. The analytical edge can be quite useful until it gets copied by many, and then it may stop generating superior returns.
Exploiting behavioural biases
As the name suggests, this edge is achieved by superior behaviour in reacting to the inputs available to maximise alpha. Modern finance assumes people behave with extreme rationality. However, researchers in behavioural finance have shown that this is not true. Moreover, these deviations from rationality are often systematic. Behavioural managers try to exploit situations where securities are mispriced by the market because of behavioural factors. At Bajaj Finserv AMC, we endeavour to combine the best of these edges.
