What is NIFTY Midcap 150?

For a rapid appreciation of wealth, investing in a midsize company can be a great option. Midsize companies come with high growth potential and companies that grow at a rapid pace can help to increase your investment returns and wealth manifold. One of the best places to find such high-growth mid-cap companies is NIFTY Midcap 150. 

Investing in stocks of midsize companies will offer higher returns as compared to large-cap companies. However, before investing in mid-cap companies, make sure to learn about the risk as well as returns associated with this particular segment.

NIFTY Midcap 150: A deeper insight

NIFTY Midcap 150 is a stock market index comprising of 150 mid-cap companies. It showcases those firms that are ranked between 101 and 250 on the basis of total market cap from the NIFTY 500 index.

Let’s break it down for better understanding. 

In the NIFTY 500 index, the top 100 companies in terms of total market cap comprise the NIFTY 100 index. The enterprises that come after them, i.e. ranked from 101-250, on the basis of total market cap, make up the NIFTY Midcap 150 index. 

Now that you know what NIFTY Midcap means let’s understand the weightage of the companies that compose this market index. 

Weightage of various firms in the NIFTY Midcap 150 index

The weightage that an establishment will have in the NIFTY Midcap 150 index totally depends on its free-float market capitalisation. You can calculate it by multiplying the number of shares a company has available in the market by its stock price. 

Let’s take an example for better understanding. 

Suppose a company named ‘Alpha’ has 2.5 lakh shares available in the stock market. Now, let’s assume that each of its stocks has Rs.50 as its price. Therefore, this company’s total market capitalisation will amount to Rs.1,25,00,000. 

Now, you already know that NIFTY Midcap 150 Index consists of 150 companies having a rank of 101-250 based on their full market capitalisation in the NIFTY 500 market index. However, a firm’s weightage in the market index depends on its free-float market cap. 

Therefore, if an establishment has a higher free-float market capitalisation, it will have a greater weightage in the market index. 

Top 20 companies of the NIFTY Midcap 150 Index 

The NIFTY 150 Midcap index undergoes a rebalancing twice a year. During this process, this index removes those stocks that have risen or fallen in market capitalisation. Furthermore, it also removes those companies that have been delisted or suspended. 

The table below shows the current top 20 companies that comprise the NIFTY Midcap 150 Index:

Corporation Name	ROE	ROCE	D/E	EV/EBIDTA	P/BV	Mcap/Sales	PE
3M India Ltd.	8.87	11.70	0.02	65.68	0.08	7.78	79.54
AAVAS Financiers Ltd.	13.64	9.49	2.76	24.17	0.17	12.58	42.62
ABB India Ltd.	11.30	15.64	0.01	129.14	0.07	9.77	119.64
Abbott India Ltd.	29.46	37.20	0.06	33.62	0.07	7.81	47.50
Adani Wilmar Ltd.	14.20	18.22	0.53	0.00	0.09	1.57	103.50
Aditya Birla Capital Ltd.	11.36	8.20	3.81	14.86	0.58	1.19	14.47
Aditya Birla Fashion & Retail Ltd.	0.00	0.00	1.42	142.81	0.10	3.82	92.57
Affle India Ltd.	27.94	24.74	0.17	72.01	0.08	14.45	67.19
AIA Engineering Ltd.	13.77	17.11	0.02	66.42	0.19	6.86	37.01
Ajanta Pharma Ltd.	22.77	28.91	0.01	19.21	0.20	4.89	22.91
Alembic Pharmaceuticals Ltd.	10.01	10.82	0.13	13.91	0.47	2.12	35.63
Alkem Laboratories Ltd.	20.98	18.00	0.28	21.91	0.23	3.49	28.30
Alkyl Amines Chemicals Ltd.	25.24	32.78	0.04	51.72	0.07	9.55	64.55
APL Apollo Tubes Ltd.	26.73	26.70	0.44	28.27	0.08	2.14	54.14
Ashok Leyland Ltd.	1.68	6.13	3.18	27.05	0.17	1.63	0.00
Astral Ltd.	23.19	29.98	0.04	68.79	0.05	9.84	86.66
Atul Ltd.	14.65	19.03	0.03	36.41	0.17	5.09	42.93
AU Small Finance Bank Ltd.	16.39	0.00	0.00	27.83	0.24	6.75	33.49
Aurobindo Pharma Ltd.	11.38	12.41	0.18	5.92	0.82	1.28	11.90
Balkrishna Industries Ltd.	22.20	24.02	0.27	22.73	0.19	4.44	26.06

Note – The data in this table is based on the information collected on 16 October 2022. 

NIFTY Midcap 150 performance over time

The equity market has its ups and downs, and so does the NIFTY Midcap 150 index. However, when you look at the long term, this index has generated excellent returns. Its annual average return rate in the last 15 years has been 16.5%. 

When you compare this index to actively managed midcap funds, their average annual returns rate was less than 14% in the last 15 years. 

Here is a table for a better understanding:

–	NIFTY Midcap 150 Returns (%)	Returns from Actively Managed Midcap Funds (%)	Returns from Actively Managed Midcap Funds (%)	Returns from Actively Managed Midcap Funds (%)
Time Period	–	Maximum	Minimum	Average
3 years	23.50	34.27	15.92	22.87
5 years	20.12	23.17	12.73	17.86
10 years	19.94	21.88	9.47	19.18
15 years	16	15.45	10.82	14

Note: The data in this table is as per an article dated 31 March 2022.

You can invest in NIFTY Midcap 150 by opting for an exchange-traded fund (ETF) or an index fund that tracks this index. However, directly following this index for the purpose of investment will limit your gain and loss potential. 

If the index rises, you will make a profit. On the other hand, when the index falls, only then will you incur a loss. In short, you will never be able to outperform the index.  

But look on the bright side. By purchasing stocks of the companies listed on the NIFTY Midcap 150 index, you are investing in stocks of those 150 companies that have rapid growth potential in the long term. 

Furthermore, investing in this index becomes much easier if you do it via exchange-traded funds.