NIFTY Smallcap 100 Index

The NIFTY Smallcap 100 Index is a benchmark stock market index in India that tracks the performance of the top 100 small-cap companies listed on the National Stock Exchange (NSE). It provides you with insights into the performance of smaller publicly traded companies.

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What is the NIFTY Smallcap 100 Index in 2024?

The Nifty Smallcap 100 Index is a stock market index that tracks the performance of the 100 smallest companies listed on the National Stock Exchange of India (NSE). It represents the behaviour and performance of the small-cap segment of the Indian stock market.

Key Features of NIFTY Smallcap 100 Index:

  • Index Objective: The Nifty Smallcap 100 Index is calculated using the free float market capitalization method, which reflects the total market value of these stocks relative to a set base value.
    • Composition: It consists of 100 publicly listed companies, making up about 5% of the total free-float market capitalization on the NSE.

    • Uses: Primarily employed for benchmarking fund portfolios and launching index funds, ETFs, and structured products.

    • Market Representation: Represents around 5% of the total market capitalization of all NSE-listed companies, providing insight into the performance of the small-cap segment.

    • Index Weightage: Each stock's influence on the index depends on its free-float market capitalization, with larger companies holding more weight.

    • Rebalancing: The index undergoes semi-annual rebalancing in March and September to ensure it reflects current market capitalization accurately.

    • Benchmarking: Serves as a benchmark for various investment products like mutual funds and ETFs, helping you to track their performance against the small-cap segment of the Indian stock market.

Highlights of the NIFTY Smallcap 100 Index

Particulars Details
Methodology Free Float Market Capitalization
No. of Constituents 100
Launch Date March 30, 2011
Base Date January 01, 2004
Base Value 1000 
Calculation Frequency Real-Time
Index Rebalancing Semi-Annually

Performance of NIFTY Smallcap 100 Index and Other Indices

Nifty Smallcap 100 Index has outperformed the other NIFTY indices over the 3-year, 5-year and 10-year duration.

Index Name  3-Year Returns 5-Year Returns 10-Year Returns
NIFTY Smallcap 100 32.1% 22.6% 18.8%
NIFTY Midcap 150  28.8% 20.80% 20.50%
NIFTY Smallcap 250 31.50% 22.60% 16.30%
NIFTY 50 15.80% 13.10% 12.50%

[Source: nseindia.com]

Which are the Constituent Stocks of the NIFTY Smallcap 100 Index?

Company’s Name  Weightage (%)
Suzlon Energy Ltd. 5.63%
BSE Ltd. 3.74%
KEI Industries Ltd. 2.12%
Multi Commodity Exchange of India Ltd. 2.07%
Angel One Ltd. 2.00%
Cyient Ltd. 1.97%
IDFC Ltd. 1.88%
Central Depository Services (India) Ltd. 1.87%
RBL Bank Ltd. 1.85%
Karur Vysya Bank Ltd. 1.83
%

[Source: nseindia.com]

What are the Sectors Included in the NIFTY Smallcap 100 Index?

Sector Weightage (%)
Financial Services  29.71%
Capital Goods 15.47%
Information Technology 9.97%
Healthcare 7.40%
Automobile and Auto Components  4.86%
Fast Moving Consumer Goods 4.09%
Metals & Mining  3.67%
Chemicals  3.10%
Power 2.85%
Telecommunication 2.82%
Construction  2.78%
Consumer Durables 2.59%
Consumer Services 2.22%
Services 2.01%
Oil, Gas & Consumable Fuels 1.92%
Textiles  1.23%
Construction Materials 1.21%
Media, Entertainment & Publication  1.20%
Forest Materials 0.89%

[Source: nseindia.com]

What Are the Returns of NIFTY Smallcap 100 Index?

Investment Period QTD** YTD** 1 Year 5 Years Since Inception
Price Return 5.83% 5.83% 68.67% 21.18% 14.80%
Total Return 5.85% 5.85% 69.81% 22.35% 16.20%

[Source: nseindia.com] **QTD, YTD and 1-year returns are absolute returns. Returns for greater than one year are CAGR returns. 

Is NIFTY Smallcap 100 Index Benchmark a Smart Investment?

The NIFTY Smallcap 100 index is a smart investment choice for you for the following reasons: 

definition & bifurcation of stock based on market capsdefinition & bifurcation of stock based on market caps

  • High potential returns: Historically, small-cap stocks have outperformed large-cap and mid-cap stocks in the long run. However, they also come with higher volatility and risk.

  • Diversification: The index tracks 100 small-cap companies across various sectors, providing instant diversification within the small-cap segment.

  • Low cost: You can gain exposure to the index through index funds or ETFs, which typically have lower fees than actively managed small-cap funds.

  • Bigger Opportunities: With fewer analysts covering smallcap funds compared to larger counterparts, fund managers have a competitive edge in identifying promising businesses early on.

    • Large-cap: Roughly 26 analysts provide coverage on average.

    • Mid-cap: Around 27 analysts offer coverage on average.

    • Smallcap: Relatively under-researched, with:

      • 415 stocks not covered by any analyst out of 954 in the BSE Smallcap Index.

      • 319 stocks covered by fewer than 5 analysts.

Benefits of Investing in Small Cap Funds in 2024

4 benefit of investing in small caps4 benefit of investing in small caps

  • Emerging Leaders: Small-cap funds focus on firms with strong foundations and skilled leadership, paving the way for future industry prominence.

  • Explosive Growth: These funds aim at budding companies in their infancy, providing ample space for substantial expansion.

  • Innovation at Heart: Small enterprises possess the freedom to innovate and venture into new technologies or markets, fostering potential for revolutionary growth.

  • Market Underdog: Small caps frequently embody untapped potential, poised for remarkable growth prospects not always available with larger corporations.

Popular Small Cap Companies in 2024

The top small-cap companies vary depending on various factors like your location, investment goals, and risk tolerance. The following shows few of the smallcap companies across different sectors:

different industry brandsdifferent industry brands

NIFTY Smallcap 100 Index Fundamentals

P/E* P/B** Dividend Yield 
29.51 3.96 0.91

*P/E: Price-to-Earnings Ratio
**P/B: Price-to-Book Ratio 

NIFTY Smallcap 100 Index Methodology

The key criteria involved in the methodology of the NIFTY Smallcap 100 Index are as follows:

  1. Eligibility Criteria for Selection of Constituent Stocks:

    • Companies from Nifty Smallcap 50 are automatically included.

    • Companies added to Nifty Smallcap 50 but not in Nifty Smallcap 100 are included.

    • Securities are included if their average daily turnover rank is within the top 70 of the top 150 constituents based on full market capitalization in Nifty Smallcap 250.

    • Securities are excluded if their full market capitalization rank falls below 180 in Nifty Smallcap 250.

    • Securities are also excluded if their full market capitalization rank is within the top 180 in Nifty Smallcap 250, but their average daily turnover rank falls below 130 among the top 180 constituents.

    • Exclusion occurs if constituents are removed from Nifty Smallcap 250.

  2. Index Re-Balancing:

    • The index is re-balanced semi-annually on January 31 and July 31.

    • Six months' average data until the cut-off date is considered for the review.

    • A four-week prior notice is given to the market before any changes take effect.

  3. Index Governance:

    • NSE indices are managed by a professional team.

    • Governance comprises a three-tier structure:

      • Board of Directors of NSE Indices Limited.

      • Index Advisory Committee (Equity).

      • Index Maintenance Sub-Committee.

Plans having NIFTY Smallcap 100 Index as Benchmark

The following investment plans offer you to invest in the Nifty Small cap 100 index benchmark: 

  1. Bajaj Allianz Life Small Cap Fund:

    • Launched on 18 May 2023, this fund is available as an investment option within seven of Bajaj Allianz Life ULIP Plans.

    • It invests in a diversified portfolio of small-cap stocks with the aim of achieving capital appreciation for investors.

    • The plan tracks the Nifty Smallcap 100 Index, which is a market-capitalization weighted index of the 100 smallest companies listed on the National Stock Exchange of India (NSE).

    • The plan invests at least 60% of its equity assets in small-cap stocks.

    • The fund is categorized as "very high risk" due to the inherent volatility of small-cap stocks.

  2. PNB MetLife Small Cap Fund

    • The PNB MetLife Smallcap Fund aims to grow your wealth through active management based on thorough research.

    • It follows the strategy to achieve superior risk-adjusted returns over policy life by investing in a diversified mix of mainly small-cap companies selected through rigorous research.

      PNB metlife historical fund performancePNB metlife historical fund performance

    • It follows the following research approach:

      • Benchmark-driven portfolio management and construction

      • Comprehensive analysis of macroeconomic and geopolitical factors

      • Evaluation of industry trends and attractiveness

      • Combination of top-down and bottom-up analyses to pinpoint investable companies

      • Selection based on assessment of business and management quality, thorough financial analysis, and valuation in relevant context

How to Invest in NIFTY Smallcap 100 Index Through Policybazaar?

Follow the steps mentioned below to start investing in the NIFTY Smallcap 100 Index:

Step 1: Fill out your name and contact number in the form on this page.

NOTE: Your information is completely safe and secure. It will be used only to personalize your plan benefits.

Step 2: Insert necessary details like your city, age, and name.

Step 3: Compare different plans based on their performance, ratings, and other relevant factors.

Step 4: Choose from the following PNB MetLife Savings Plans to access the NIFTY Smallcap 100 Index:

  • Mera Wealth Plan

  • PNB MetLife Capital Guarantee Plans

  • Goal Ensure Multiplier Savings Plan

  • Goal Ensure Multiplier – Waiver of Premium (WoP)

  • Goal Ensure Multiplier – Retirement Plan

Step 5: Click on "Invest Now" and follow the on-screen prompts to complete your purchase.

Step 6: Provide the necessary KYC details and finalize the payment.

Step 7: Receive confirmation of your purchase once the payment is successful.

 

NIFTY Smallcap 100 Index– FAQs

  • What is the NIFTY Smallcap 100 Index?

    The NIFTY Smallcap 100 Index is a stock market index that tracks the performance of 100 small-capitalization companies listed on the National Stock Exchange of India (NSE). It represents about 5% of the free-float market capitalization of the Indian small-cap segment.
  • What are the benefits of investing in the NIFTY Smallcap 100 Index?

    Small-cap companies have the potential for high growth, which can lead to higher returns compared to large-cap or mid-cap companies. However, they also carry higher risk due to their smaller size and less established track record.
  • What are the risks of investing in the NIFTY Smallcap 100 Index?

    Small-cap companies are more volatile than larger companies, meaning their stock prices can fluctuate more significantly. They are also more susceptible to economic downturns and industry-specific factors.
  • How can I invest in the NIFTY Smallcap 100 Index?

    You can invest in the NIFTY Smallcap 100 Index through various instruments, including:
    • Exchange-traded funds (ETFs) that track the index.

    • Index mutual funds.

    • Directly buying stocks in the index, although this requires individual stock research and selection.

  • What are the fees for investing in the NIFTY Smallcap 100 Index?

    Fees vary depending on the investment vehicle you choose. ETFs typically have lower fees than actively managed mutual funds.
  • Is the NIFTY Smallcap 100 Index suitable for all investors?

    Small-cap investing is not suitable for all investors, especially those with a low risk tolerance or short investment time horizon.
  • What are some alternatives to the NIFTY Smallcap 100 Index?

    Other small-cap indexes in India include the Nifty Smallcap 250 and the BSE Smallcap Index. You can also consider mid-cap or large-cap indexes depending on your risk tolerance and investment goals.
  • Can I invest in the NIFTY Smallcap 100 Index internationally?

    Yes, some international ETFs and mutual funds track the NIFTY Smallcap 100 Index, allowing foreign investors to participate.
  • What are some strategies for mitigating the risk of investing in the NIFTY Smallcap 100 Index?

    Diversification across different sectors and within the small-cap segment can help spread risk. Investing through ETFs can offer instant diversification compared to individual stock picking.

*Past 5 Year annualised returns as on 01-04-2024
*All savings plans are provided by the insurer as per the IRDAI approved insurance plan. Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.
**Returns as on 18th Feb'24. 31% returns are returns for PNB MetLife Midcap Fund for the last 5 years.

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