NIFTY Midcap 150 TRI

The NIFTY Midcap 150 Total Returns Index (NIFTY Midcap 150 TRI) is the dividend-reinvested variant of the NIFTY Midcap 150 index, maintained by NSE Indices Limited. The index covers the 150 companies ranked 101st to 250th by full market capitalisation among all NSE-listed stocks, constituting the mid-cap segment of the Indian equity market as formally defined by SEBI. As the canonical benchmark for the SEBI-mandated mid-cap equity category, the NIFTY Midcap 150 TRI is used by virtually every fund house that operates a midcap mutual fund scheme to measure and disclose scheme performance.

Midcap investing in India has a distinct character that sets it apart from both large-cap and small-cap investing. Midcap companies – ranked 101-250 by market capitalisation – tend to be businesses that have already survived the high-risk startup phase and established viable business models, but retain significant growth potential compared with large-cap blue chips. They are often the emerging leaders of their respective industries: companies that may join the large-cap ranks over a 5-10 year horizon if they execute their growth strategies successfully.

Publisher and base data

• Publisher: NSE Indices Limited
• Base date: 1 January 2004
• Base value: 1,000
• Constituent count: 150

The base date of 1 January 2004 situates the index in the early phase of India’s economic acceleration driven by the IT services export boom, infrastructure spending, and rising domestic consumption. Back-calculation to this date provides approximately two decades of historical data for analysis.

SEBI definition of midcap and its implications

SEBI’s circular on mutual fund categorisation (October 2017) formally defines mid-cap companies as those ranked 101st to 250th in terms of full market capitalisation on a combined NSE-BSE ranking, updated by AMFI every six months. This regulatory definition has important practical implications:

1. Semi-annual AMFI list: AMFI publishes the updated list of large-cap, mid-cap, and small-cap companies based on the combined NSE-BSE ranking in January and July each year. Mutual funds must adjust their portfolios to reflect this classification within a specified period after the list is published.

2. Mandatory minimum exposure: SEBI requires midcap equity fund schemes to invest a minimum 65% of their assets in SEBI-defined midcap companies (ranks 101-250). The remaining 35% may be invested in other equities, debt, or cash.

3. Index alignment: the NIFTY Midcap 150 index is constructed to precisely match the SEBI-defined midcap universe on NSE, covering companies ranked 101-250. This alignment makes it the most appropriate index benchmark for midcap funds.

Methodology

Weighting: The NIFTY Midcap 150 uses free-float market capitalisation weighting. Each constituent’s weight is proportional to its free-float adjusted market capitalisation within the 150-company universe.

Liquidity requirements: Selection requires a minimum six-month NSE listing history. Impact cost thresholds are applied, though calibrated for the lower liquidity of mid-cap stocks compared with the NIFTY 50 (where the threshold is 0.50% impact cost on Rs 10 crore trades; for mid-caps, the threshold is set at a different level reflecting typical institutional trade sizes in this segment).

Rebalancing: Semi-annually, in April and October. Constituent changes are announced approximately three to four weeks in advance, giving passive fund managers time to rebalance portfolios.

TRI methodology: The TRI layer applies dividend reinvestment on ex-dividend dates for each of the 150 constituents, using NSE’s standard corporate action adjustment methodology. Dividends are assumed reinvested at the ex-dividend date closing price.

Free-float estimation: NSE Indices updates free-float factors for constituents based on disclosed shareholding patterns (filed quarterly by listed companies under SEBI’s LODR regulations). Promoter holdings, government stakes, and strategic investor locks reduce the free-float; public institutional and retail shareholding increases it.

TRI versus PRI

The dividend yield of the midcap segment has historically been lower than that of large-caps, as many midcap companies reinvest earnings for growth rather than paying dividends. Typical midcap segment dividend yields range from 0.5-1.0% per annum, implying a TRI-PRI annual differential of 0.5-1.0 percentage points.

Over a decade, this compounding difference implies approximately 5-10 percentage points of cumulative TRI outperformance over the PRI. While smaller than the TRI-PRI gap for large-cap indices, it is still meaningful for benchmarking purposes. Before 2018, midcap fund schemes benchmarked against price return indices appeared to outperform by a margin that partially reflected dividends they were receiving but the index was not crediting.

Sectoral composition

The NIFTY Midcap 150’s sectoral composition differs substantially from large-cap indices, reflecting the industries where Indian companies in the 101-250 market cap band tend to cluster:

The higher concentration in capital goods, specialty chemicals, healthcare intermediaries, and real estate compared with the NIFTY 50 TRI gives the Midcap 150 a very different character. Capital goods companies – engineering conglomerates, defence equipment makers, industrial automation firms – are structurally tied to India’s infrastructure and manufacturing investment cycle. Specialty chemicals is a sector where many Indian companies have built significant global market share in niche intermediates and active pharmaceutical ingredients (APIs), offering differentiated export earnings.

This sectoral difference is why the midcap index can diverge sharply from the large-cap index in specific macro environments:

• During infrastructure boom phases, midcap capital goods companies outperform.
• During global chemical demand downturns, midcap specialty chemical names underperform.
• In banking crises or NBFCs stress events, the lower financial services weight in midcaps provides relative insulation.

Volatility and risk profile

The NIFTY Midcap 150 TRI is significantly more volatile than the NIFTY 50 TRI. Key risk dimensions:

Market impact and liquidity: Mid-cap stocks have lower average daily trading volumes than large-caps. An institutional fund trying to build or reduce large positions can move mid-cap stock prices meaningfully, creating implicit costs beyond the bid-ask spread. During market stress, liquidity in mid-cap stocks can dry up rapidly, making it difficult to sell at quoted prices.

Earnings cyclicality: Smaller, less diversified businesses are more exposed to single-customer concentration, input cost volatility, and sector-specific downturns. A mid-cap company may have only 2-3 product lines; a large-cap conglomerate has dozens.

Drawdown history: During major market corrections:

• 2018-19 mid-cap correction: NIFTY Midcap 150 fell approximately 25-35% from peak to trough, while the NIFTY 50 fell only 10-15%.
• March 2020 Covid crash: the mid-cap index fell approximately 40-45%, compared with 35-38% for the NIFTY 50.
• 2022 global tightening: mid-caps underperformed large-caps again as risk appetite contracted.

Recovery periods also tend to be sharper for midcaps, explaining the higher long-run returns.

Historical returns

The midcap premium over large-caps over long periods reflects both the higher growth rates of midcap companies and the illiquidity premium (compensation for holding less liquid assets). However, this premium is not earned in a straight line – there are extended periods (2018-20) when midcaps significantly underperform large-caps.

Mutual fund usage

SEBI’s categorisation framework requires midcap equity funds to invest a minimum 65% of assets in SEBI-defined midcap companies (ranks 101-250). The NIFTY Midcap 150 TRI is used as the benchmark by midcap funds from most major AMCs:

• Kotak Emerging Equity Fund (one of the largest midcap funds)
• HDFC Mid-Cap Opportunities Fund (the largest midcap fund by AUM)
• Nippon India Growth Fund
• Axis Midcap Fund
• Mirae Asset Midcap Fund
• SBI Magnum Midcap Fund
• Invesco India Mid Cap Fund

Some AMCs use the BSE Midcap 150 TRI or BSE Midcap Select Total Return Index as an alternative benchmark. SEBI permits either BSE or NSE midcap index variants.

Passive midcap investing

Midcap index funds and ETFs tracking the NIFTY Midcap 150 TRI include:

• Nippon India Nifty Midcap 150 Index Fund
• Motilal Oswal Nifty Midcap 150 Index Fund
• UTI Nifty Midcap 150 Quality 50 Index Fund (a quality-tilted variant)
• HDFC NIFTY Midcap 150 ETF

Passive midcap investing requires accepting the full sector exposure and volatility of the index. Tracking error for midcap index funds is typically higher than for NIFTY 50 index funds, due to the lower liquidity of constituents and higher rebalancing transaction costs.

See also

• NIFTY 50 TRI
• NIFTY Smallcap 250 TRI
• NIFTY 500 TRI
• BSE 100 TRI
• National Stock Exchange of India
• Equity ETF (India)
• Mutual fund
• AMFI

References

1. NSE Indices Limited. “NIFTY Midcap 150 Index Methodology.” niftyindices.com. Accessed 2026.
2. SEBI. Circular SEBI/HO/IMD/DF3/CIR/P/2017/114 on mutual fund categorisation, dated 6 October 2017.
3. AMFI. “AMFI bi-annual large-cap/mid-cap/small-cap company list.” amfiindia.com. 2025.
4. SEBI. Circular SEBI/HO/IMD/DF3/CIR/P/2018/04 on TRI benchmarks, dated 4 January 2018.
5. NSE Indices Limited. “NIFTY Midcap 150 Fact Sheet.” niftyindices.com. 2025.