The Nifty 500 LargeMidSmall Equal-Cap Weighted Index (NIFTY500LMSEQL) is derived from the Nifty 500 Index and tracks the performance of 500 companies across large, mid and small capitalisation segments. What makes it different is the way it allocates weight. Instead of allowing larger companies to dominate the index, it assigns equal weight to each market cap segment at the time of rebalancing.
Within each segment, stocks are weighted based on their free-float market capitalisation. The segment weights are aligned equally on a quarterly basis and implemented from the last trading day of March, June, September and December, in line with the prescribed methodology.
The index has a base date of 1 April 2005 and a base value of 1000, and it is calculated on an end-of-day basis. The Total Returns Index, or TRI, version includes both price changes and reinvested dividends, giving a broader view of returns compared to a price-only index.
Like all equity indices, its performance is influenced by market movements and may vary over time.
How does the Nifty 500 Large Mid Small Equal-Cap Weighted Index work?
The index follows a disciplined rebalancing approach to maintain equal exposure across large, mid and small cap segments. While market movements may temporarily change segment weights, the index realigns them on a quarterly basis to restore balance.
It is reviewed semi-annually to reflect changes in the underlying Nifty 500 universe. Any additions or replacements are implemented as per the prescribed schedule. Within each segment, stocks continue to be weighted by free-float market capitalisation.
In simple terms, the index does not remain static. It adjusts periodically to maintain its intended structure while following defined governance standards and calculation norms.
Company selection criteria of the Nifty 500 Large Mid Small Equal-Cap Weighted Index
The Nifty 500 LargeMidSmall Equal-Cap Weighted Index selects its companies from the Nifty 500 universe and groups them into large, mid and small cap segments. At each review, the index assigns equal weight to these three segments, while individual stocks within each segment are weighted by free-float market capitalisation. The segment weights are aligned quarterly and the index is reviewed semi-annually as per the prescribed methodology.
The tables below show the latest sector representation and top constituents by weightage as per the March 30, 2026 factsheet:
Sector representation
| Sector | Weight (%) |
| Financial Services | 27.59 |
| Capital Goods | 9.82 |
| Healthcare | 9.6 |
| Automobile and Auto Components | 7.38 |
| Information Technology | 5.76 |
| Oil, Gas & Consumable Fuels | 5.22 |
| Fast Moving Consumer Goods | 4.81 |
| Consumer Services | 4.13 |
| Chemicals | 4 |
| Metals & Mining | 3.5 |
| Consumer Durables | 3.38 |
| Power | 2.88 |
| Telecommunication | 2.79 |
| Construction | 2.5 |
| Services | 2.42 |
| Construction Materials | 1.55 |
| Realty | 1.54 |
| Textiles | 0.51 |
| Media, Entertainment & Publication | 0.42 |
| Diversified | 0.2 |
Top constituents by weightage
| Company Name | Weight (%) |
| HDFC Bank Ltd. | 3.01 |
| Reliance Industries Ltd. | 2.44 |
| ICICI Bank Ltd. | 2.31 |
| Bharti Airtel Ltd. | 1.47 |
| Infosys Ltd. | 1.18 |
| Larsen & Toubro Ltd. | 1.1 |
| State Bank of India | 1.09 |
| BSE Ltd. | 1.05 |
| Axis Bank Ltd. | 0.89 |
| ITC Ltd. | 0.74 |
Source: Nifty 500 LargeMidSmall Equal-Cap Weighted Index Factsheet (March 30, 2026) and NSE Indices Methodology Document (March 2026); data is subject to change as per periodic review.
What is the difference between the Nifty 500 Large Mid Small Equal-Cap Weighted Index and the BSE 500?
Both indices represent broad market exposure, but they differ in how companies are weighted and how segment allocation is managed:
| Basis Of Comparison | Nifty 500 LargeMidSmall Equal-Cap Weighted Index | BSE 500 |
| Parent Universe | Derived from the Nifty 500 | 500 companies listed on BSE |
| Weighting Method | Equal allocation to large, mid and small caps; free-float weighting within each segment | Free-float market capitalisation weighted |
| Segment Allocation | Equal segment weight at review | No fixed segment allocation |
| Rebalancing & Review | Quarterly segment alignment; semi-annual review | Semi-annual reconstitution and rebalancing |
| Return Variant | Available as TRI (includes dividends) | Available as TRI (includes dividends) |
Potential benefits of investing in the Nifty 500 Large Mid Small Equal-Cap Weighted Index
Understanding the structure of this index can help you see how it may offer diversified market participation within a single benchmark:
Balanced Exposure Across Company Sizes
The index assigns equal weight to large, mid and small cap segments at rebalancing, helping avoid concentration in only the largest companies.
Broad Market Representation
Since it is derived from the Nifty 500 universe, the index covers a wide range of companies representing a significant portion of NSE free-float market capitalisation.
Transparent Rules-Based Framework
The index follows a defined methodology with scheduled quarterly alignment and semi-annual review under established governance standards.
Segment Rebalancing Discipline
Equal segment weights are realigned periodically, helping maintain the intended allocation across market capitalisation categories over time.
Comprehensive Return Measurement (TRI Variant)
The Total Returns Index version includes both price movements and reinvested dividends, offering a broader representation of returns compared to a price-only index.
Risks associated with the Nifty 500 Large Mid Small Equal-Cap Weighted Index
Before considering exposure to this index, it is important to understand the inherent risks that come with its structure and equity market participation:
Equity Market Risk
As an equity index, its performance is influenced by overall market movements and may fluctuate based on economic and corporate developments.
Mid And Small Cap Volatility
Equal allocation to mid and small cap segments means the index may experience sharper price movements compared to large-cap-heavy indices.
Market Capitalisation Rebalancing Impact
Periodic realignment of segment weights may lead to changes in allocation during scheduled reviews.
Sector Concentration Risk
Sector weights reflect the composition of the underlying Nifty 500 universe and may shift over time.
Tracking Error
Index funds or ETFs tracking this benchmark may experience tracking error due to expenses, cash holdings or operational factors.
Who may consider investing in the Nifty 500 Large Mid Small Equal-Cap Weighted Index?
Before considering this index, it helps to reflect on your investment horizon and how comfortable you are with market ups and downs:
- You may consider this index if you want exposure across large, mid and small cap companies through a single benchmark.
- It may suit you if you prefer a rules-based structure that maintains equal allocation across market capitalisation segments.
- You may evaluate this approach if you are comfortable with equity market volatility, including fluctuations from mid and small cap exposure.
- It can be considered by investors seeking broad market representation from the Nifty 500 universe rather than focusing on one segment.
- This structure may align with investors willing to stay invested across market phases, recognising that returns are subject to market risks and may vary.
How to invest in the Nifty 500 Large Mid Small Equal-Cap Weighted Index?
You cannot directly invest in the index itself, but you can gain exposure to it through investment products that track or replicate it:
- Index funds: Asset Management Companies may offer index funds that aim to track the Nifty 500 LargeMidSmall Equal-Cap Weighted Index. These funds seek to mirror the index composition, subject to tracking error.
- ETFs (Exchange-Traded Funds): ETFs that track the index are listed on stock exchanges and can be bought and sold like shares. They aim to replicate index performance, subject to market and tracking risks.
- Systematic Investment Plan (SIP): If investing through an index fund, you may choose to invest regularly through SIPs or make a lump sum investment, depending on your financial plan.
Whichever route you choose, it is important to review the scheme documents carefully and ensure that the investment aligns with your risk appetite and time horizon, as returns are subject to market risks and may vary over time.
How does Bajaj Finserv Flexi Cap Fund use the BSE 500 TRI?
The Bajaj Finserv Flexi Cap Fund uses the BSE 500 TRI as its benchmark, which means the index acts as a reference point to evaluate the fund’s performance and overall portfolio positioning. The BSE 500 TRI represents broad market exposure across sectors and market capitalisations, providing a comprehensive comparison framework.
However, the fund does not simply replicate the index. It is actively managed and may differ from the benchmark in terms of stock selection, sector allocation and market capitalisation exposure. With an Active Share of 66%, the portfolio meaningfully varies from the benchmark composition.
Frequently Asked Questions about Nifty 500 Large Mid Small Equal-Cap Weighted Index
What does equal-cap weighted mean in the Nifty 500 LargeMidSmall Equal-Cap Weighted Index?
It means the index assigns equal weight to large cap, mid cap and small cap segments at the time of rebalancing rather than weighting companies purely by market capitalisation.
How is the Nifty 500 LargeMidSmall Equal-Cap Weighted Index constructed?
It is constructed using stocks from the Nifty 500 universe that meet the prescribed eligibility criteria, with equal allocation assigned to each market capitalisation segment as per NSE methodology.
How are large, mid and small caps weighted in this index?
Each segment receives equal allocation at the time of periodic rebalancing, while individual stocks within each segment are weighted by free-float market capitalisation.
How often is the Nifty 500 LargeMidSmall Equal-Cap Weighted Index rebalanced?
The index is reconstituted semi-annually, and segment weights are aligned equally on a quarterly basis from the last trading day of March, June, September and December.
Are there index funds or ETFs tracking this equal-cap weighted index?
Certain asset management companies may offer index funds or ETFs that track this benchmark, subject to regulatory approvals and product availability.
Is the equal-cap weighted index suitable for long-term investors?
It may be considered by investors seeking diversified equity exposure through a passive structure and who understand the risks associated with equity market volatility.
What are the risks of investing in the Nifty 500 LargeMidSmall Equal-Cap Weighted Index?
Risks include overall equity market volatility, potential fluctuations arising from mid cap and small cap exposure, and changes in sector allocation over time.
What is the PE ratio of the Nifty 500 LargeMidSmall Equal-Cap Weighted Index?
As per the latest available NSE factsheet dated 17 April 2026, the Price-to-Earnings (PE) ratio is approximately 24.28, and this figure may change over time.
What is the PB ratio of the Nifty 500 LargeMidSmall Equal-Cap Weighted Index?
As per the latest available NSE factsheet dated 17 April 2026, the Price-to-Book (PB) ratio is approximately 3.33, and this figure may change over time.
