Nifty 200: Meaning, Key Characteristics & Selection Criteria

The Indian stock market is expansive, populated by thousands of listed entities. Investors and analysts may use indices—curated baskets of stocks—to navigate and measure specific market segments. For those seeking a wider lens on the market, the Nifty 200 Index may function as a benchmark. It captures the performance of both large and mid-sized companies in terms of market capitalisation, presenting a broader view of the stock market than pure large or mid cap indices.

Table of contents

• What is the Nifty 200 Index?
• Key characteristics of the Nifty 200 Index
• Selection criteria for companies in Nifty 200
• Importance of Nifty 200 for investors and fund managers
• How to invest in Nifty 200

What is the Nifty 200 Index?

The Nifty 200 Index is a broad-market benchmark. Its core purpose is to monitor the performance and behaviour of 200 large and mid cap companies listed on the National Stock Exchange (NSE).

The Nifty 200 meaning can be understood through its composition. It is not a standalone selection of 200 stocks. Instead, it's a composite index. The index is formed by combining all constituents of the Nifty 100 Index (which represents the top 100 large cap companies) and all constituents of the Nifty Midcap 100 Index (which represents stocks ranked 101st to 200th by market capitalisation).

Key characteristics of the Nifty 200 Index

The Nifty 200's methodology is clearly defined so that it remains a consistent market measure.

• Weighting methodology: The index relies on a free-float market capitalisation method. In practice, this means a stock's weight is based only on the shares available for public trading. It filters out shares held by promoters, government, or other locked-in entities.
• Base date and value: The index has a base date of January 1, 2004, and a base value set at 1,000, as per NSE's official index methodology document.'
• Rebalancing: To stay current and accurately reflect the market, the index is rebalanced semi-annually. This review process uses data from two six-month periods, with cut-off dates of January 31 and July 31. Any changes, such as additions or removals, are announced to the public with a four-week notice.
• Market representation: By blending the relative stability of large caps with the growth potential of mid caps, the Nifty 200 covers a substantial portion of the NSE's total market capitalisation. This gives it a more diversified profile, both sectorally and by stock, compared to the Nifty 50.

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Selection criteria for companies in Nifty 200

To make it to the Nifty 200 Index, a company must meet these conditions:

• The stock must first be a constituent of either the Nifty 100 Index or the Nifty Midcap 100 Index.
• Any change to the Nifty 100 or Nifty Midcap 100 automatically updates the Nifty 200. For instance, if a stock drops from the Nifty 100 but still qualifies for the Nifty Midcap 100, it stays in the Nifty 200. The same logic applies if a stock is promoted from the mid cap index to the large cap one.
• A stock is only dropped from the Nifty 200 if it falls out of both the Nifty 100 and the Nifty Midcap 100. This typically happens when its market capitalization rank falls below 200, though other factors in NSE's selection criteria may also apply.

Importance of Nifty 200 for investors and fund managers

The Nifty 200 is considered a functional tool for different market participants.

For fund managers, especially those dealing with portfolios in the large cap and mid cap segments, Nifty 200 may serve as an important benchmark, providing a broad representation of the market.

For investors, the Nifty 200 may serve as a comprehensive barometer of market sentiment and economic health, as it represents a diversified mix of stocks across many sectors, such as financial services, FMCG, chemicals, and healthcare, offering a picture of potential growth and value opportunities in the market.

How to invest in Nifty 200

An investor cannot purchase an index directly. Instead, they may use financial products that replicate it, such as index funds or ETFs. In general, to get exposure to an index, investors can choose one of the following routes.

• Index mutual funds that track a particular index
• ETFs that track that index
• Direct investment into stocks that are a part of the index.

However, there are very few Indian fund houses that offer Nifty 200 Index Funds or ETFs.

Conclusion

The Nifty 200 Index holds a significant place in the Indian financial market. It bridges the gap between the established large caps of the Nifty 100 and the high-growth potential mid caps of the Nifty Midcap 100. For analysts, this may provide a robust, wide-angle view of market performance. For investors, while direct, broad funds tracking the Nifty 200 are less common, its constituent parts—and the investment strategies derived from it—offer ways to build a diversified portfolio capturing the core of India's listed economy.

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Frequently Asked Questions (FAQs)

Can retail investors directly invest in the Nifty 200?

No, an investor cannot buy the Nifty 200 index directly, as it is not an investment product. Investment must be made via funds that are designed to track the Nifty 200 or strategy indices derived from it. One can also build a portfolio by identifying and investing in the underlying stocks in the same weightage, though this may be complicated and require thorough research.

How often is the Nifty 200 index reviewed or rebalanced?

The Nifty 200 Index is rebalanced twice a year (semi-annually). This review uses data ending January 31 and July 31 each year.

Is the Nifty 200 more volatile than the Nifty 50?

Yes, the Nifty 200 is generally seen as more volatile than the Nifty 50 Index. This is because its 200 stocks, including mid cap stocks, which tend to be more volatile than the established large cap stocks in the Nifty 50.

Which sectors dominate the Nifty 200 index?

According to the Nifty indices website as on December 4, 2025, the financial services sector has the largest weightage, followed by information technology, oil, gas and consumable fuels automobile and auto components, and fast-moving consumer goods.

How does Nifty 200 differ from Nifty Next 50?

The Nifty Next 50 represents stocks ranked 51-100 by market capitalisation – all large cap stocks. The Nifty 200 represents stocks ranked 1-200, as it is a combination of the Nifty 100 (stocks ranked 1-100) and the Nifty Midcap 100 (stocks ranked 101-200). Thus, it comprises both large and mid cap companies.

What is the methodology behind the Nifty 200 calculation?

The index is calculated using the free-float market capitalisation weighted method. Its value reflects the total free-float market value of all 200 components relative to its base value of 1,000 on January 1, 2004.