NSE Indices – Concentration Analysis: Fascinating shift as you move from large-cap indices to microcap index

NSE Indices – Concentration Analysis: Fascinating shift as you move from large-cap indices to microcap index

Lets start with the structure of Nifty Indices

• The Mother Index – Nifty 500 – Represents 79.55% of the traded value of all stocks on NSE
  • Top 5 Sectors – 61.32%
  • Top 10 Weights – 32.86%
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  Breaking down the broader index into its subsets to see the concentration in each of them
  Nifty 50 – Represents 26.84% of the traded value of all stocks on the NSE.
  • Top 5 Sectors – 70.54%
  • Top 10 Weights – 55.29%
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  Nifty Next 50 – Represents 11.18% of the traded value of all stocks on NSE.
  • Top 5 Sectors – 57.39%
  • Top 10 Weights – 33.67%
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  Going down the order to the Midcap and Smallcap Indices
  Nifty Midcap 150 – Represents 22.81% of the traded value of all stocks on NSE
  • Top 5 Sectors – 64.32%
  • Top 10 Weights – 17.88%
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  Nifty Smallcap 250 – Represents 11.24% of the traded value of all stocks on NSE
  • Top 5 Sectors – 63.29%
  • Top 10 Weights – 14.97%
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  Lastly, the 250 stocks beyond Nifty 500
  Nifty Micropcap 250 –
  • Top 5 Sectors – 54.44%
  • Top 10 Weights – 12.78%
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  Observations
  • Sector Concentration Falls as You Go Down the Curve
  • Financials are the single biggest driver of Indian equities across the spectrum
  • Financials command a massive 37.06% of the Nifty 50 but drop to 24.96% in the Smallcap 250 & further 11.22% in Microcap 250
  • Nifty Microcap 250 is the only index where Capital Goods (19.45%) overtakes Financials (11.22%) as the primary driver
  • Top 10 concentration: Nifty 50 has 55.29% concentration in just 10 stocks vs Nifty Microcap 250 is exceptionally granular; its top 10 holdings represent only 12.78% of the index.
  • Healthcare: Nifty 50 has 3.99% weight vs Smallcap 250 has 14.03% weights
  • FMCG declines down the curve – Nifty 50 – 6.01%; Next 50 – 9.73% & Microcap 250 has 5.07%
  • Commodities Fade Down the Curve – Oil & Gas from 9.93% (N50) → 0.62% (M250) & Metals 4.03% (N50) → 1.12% (M250)
  • IT Loses Dominance Down the Curve – 10.83% (N50) to 2.81% (M250)
  • Consumer Services rises from 2.43% (N50) to 7.13% (M250), and Consumer Durables from 2.37% to 6.76%
  • Chemicals steadily increases from 3.41% (Nxt 50) to 8.71% (M250)
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