Nifty Smallcap250 Quality 50

Nifty Smallcap250 Quality 50 Index tracks the performance of small cap stocks which are selected based on their quality scores. The quality score for each company is determined based on return on equity (ROE), financial leverage (Debt/Equity Ratio) and earning (EPS) growth variability analysed during the previous 5 years.The index includes upto 50 stocks selected from the parent Nifty Smallcap 250 index based on the high quality score. The weight of each stock in the index is based on the combination of stock’s quality score and its free float market capitalization.Nifty Smallcap250 Quality 50 Index can be used for a variety of purposes such as benchmarking fund portfolios, launching of index funds, ETFs and structured products.

• Stocks forming part / going to be a part of the Nifty Smallcap 250 index at the time of review are eligible for inclusion in the index subject to the following:
o Non - F&O stocks within Nifty Smallcap 250 index are ineligible for inclusion if the total instances of the stock hitting the upper or lower circuit (price band) * during the past 6 months as of the cut-off date is more than or equal to 20% of the number of total trading days over the same period
o Companies having percentage pledged promoter’s shares greater than 20% are ineligible for inclusion in the index o Bottom 10 percentile stocks based on Value score are ineligible for inclusion in the index
o Bottom 10 percentile stocks based on 6 month average daily turnover are ineligible for inclusion in the index
o Bottom 10 percentile stocks based on high volatility are ineligible for inclusion in the index
• Top 50 stocks based on the high-quality score within the eligible universe
• The weight of the stock in the index is derived by multiplying the square root of the free float market cap with the quality score of that stock
• Index rebalancing and reconstitution will be done on a semi-annual basis in June and December using data ending last trading day of May and November respectively.
• Index Re-Balancing: Index is re-balanced on semi-annual basis. The cut-off date is May 31 and November 30 of each year, i.e. For semi-annual review of indices, average data for six months ending the cut-off date is considered. Four weeks prior notice is given to market from the date of change.
• Index Governance: A professional team manages all NSE indices. There is a three-tier governance structure comprising the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity) and the Index Maintenance Sub-Committee.