National Stock Exchange Revises Methodology For Index Inclusion
The revision in methodology would be applicable from the upcoming review of the Nifty equity indices, the NSE said.
The National Stock Exchange has revised the methodology for inclusion of stocks in the Nifty Midcap 50, Nifty Smallcap 50, and Nifty sectoral indices.
The Index Maintenance Sub-Committee (Equity) of the NSE Indices revised the methodology, a statement from the exchange said.
The top 100 companies from the Nifty Midcap 150, in terms of average daily full market capitalisation and average daily turnover over the previous six months, will be eligible to be included in the Nifty Midcap 50. For the Nifty Smallcap 50, the top 150 stocks from the Nifty Smallcap 250 will be eligible for inclusion, the statement said.
This is an additional eligibility criteria for both indices.
Both broader market indices will get 50 stocks each from their respective eligible universes. The selection criteria stipulates stocks with a higher six-month average free-float market capitalisation.
The revision in methodology would be applicable to the upcoming review of the Nifty equity indices, the NSE said.
Revision In Methodology Of Nifty Midcap 50 Index
Compulsory Inclusion
Top 30 F&O stocks in terms of six-month average free-float market capitalisation. Earlier, it was any F&O stock based on the six-month average free-float market capitalization of the top 30 constituents.
Any non-member eligible F&O stock or non-F&O stock, only if its free-float market capitalization is at least 1.5 times the free-float market capitalisation of the smallest F&O index constituent. Earlier, the full market capitalisation of any F&O constituent in Nifty Midcap 150 was taken.
Any non-member eligible non-F&O stock will be included if its free-float market capitalisation is at least 1.5 times the free-float market capitalization of the smallest non-F&O index constituent. Earlier, the securities with the highest average daily turnover were selected from the top 30 non-F&O constituents in the Nifty Midcap 150 index.
A non-member eligible F&O stock shall be compulsorily included in the index, replacing the smallest non-F&O stock in the index based on free-float market capitalization in the index. This criterion is a new addition.
Compulsory Exclusion
Constituents are excluded from the Nifty Midcap 150. This exclusion still remains.
Rank based on average full market capitalization or average daily turnover (six-month average data) falls beyond 100 within Nifty Midcap 150. Earlier, it was excluded when it fell below 70 constituents among F&O constituents in the Nifty Midcap 150.
Rank based on six-month average free float market capitalisation falls beyond 70 within the eligible universe of the top 100 stocks. This exclusion is a new addition.
Revision In Methodology Of Nifty Smallcap 50 Index
Compulsory Inclusion
Top 30 F&O stocks in terms of six-month average free-float market capitalisation. Earlier, it was based on average daily turnover among the top 30 from the top 100 constituents selected based on full market capitalization in the Nifty Smallcap 250.
The free-float market capitalization of non-member eligible stocks is at least 1.5 times that of the free-float market capitalization of the smallest index constituent. This inclusion is a new addition.
Compulsory Exclusion
Constituents are excluded from the Nifty Smallcap 250. This exclusion still remains.
Rank based on average full market capitalization or average daily turnover falls (six-month average data) beyond 150 within Nifty Smallcap 250. Earlier, it was excluded when market capitalization fell below 130 constituents.
Rank based on free-float market capitalization falls beyond 70 within the eligible universe. Earlier, it was excluded when market capitalization was among the top 130 among the Nifty Smallcap 250 constituents, but rank based on average daily turnover falls below 80 constituents.
