The first 100 stocks as per market capitalization are called Large-cap stocks. Next 101 to 250 stocks are called Midcap Stocks. 251 to 500 stocks are called Small-cap Stocks. All the remaining stocks from 501 onwards can be termed as “Microcap stocks. They are also referred to as Penny Stocks. Microcaps are small companies with a market capitalization of less than 500 crore. Microcap Stocks have limited resources and capital. They are in an early growth stage and have a long way to go.
Microcap stocks have the potential for high growth. They can become multi-bagger stocks in the future. While selecting Microcap stocks, an investor should be extra careful because for many stocks short history is available to judge their performance.
Investing in them can be risky. Investors should do proper research before investing in these stocks. They are for high-risk profile investors looking for extraordinary returns.
Nifty microcap 250 index stocks list
Microcap Stocks India
Nifty Microcap 250 Index
This index tracks the performances of 250 microcap stocks listed in NSE beyond the first 500 companies. The starting date of this index is April 01, 2005, with a base value of 1000. As of March 2025, its closing figure is 20,786. NSE has developed this index to track the performance of 250 microcap stocks from 501 to 750. India is a developing economy. More investors are taking interest in investing in small cap Stocks. Small-cap Stocks and mutual funds are becoming more popular among investors. Small-cap investing is outperforming MID and large-cap Stocks in the long run. Same way, now People are showing interest in investing in microcap stocks and funds.
Investing in the Nifty Microcap 250 Index fund is one of the best options available to invest in Microcap Stock. This Fund will passively invest in 250 microcap companies.
Since investment is going in 250 microcap companies, there is a minimum risk of
losing their money. It will be a wiser decision to invest in the top 250
microcap companies than 5/10 individual companies. Nifty Microcap 250 index returns outperform the returns of the Small Cap Index fund in the Short and Long Term.
Motilal Oswal Nifty Microcap 250 Index Fund.
Motilal Oswal fund house is the first investment house that has launched a passive mutual funds scheme in the Nifty Microcap 250 index. The name of the fund is Motilal Oswal Nifty Microcap 250 Index Fund.
This fund was launched on 5th July, 23. As of March, 25, this fund has completed 1 Year and 7 months so a short history is available to judge its performance. Since launch, as on March 25, this fund has given a return of 29.38% Since this fund is passively following the Nifty Microcap 250 index, it will give a return near this index.
The following are important basic Details of
Motilal Oswal Nifty Microcap 250 Index Fund.
| Fund Manager | Swapnil P. Mayekar |
| Fund Size | 1672 Cr |
| Expense Ratio | 0.43 |
| PE Ratio | 36.03 |
| Sharpe Ration | 0.26 |
| Exit Load | 1% ( If Redeemed within 15 DAYS ) |
Returns since launch: 29.38 ( Approx 1 Yr. & 6 months)
Advantages of Motilal Oswal Nifty Microcap 250 Index Fund.
- Since it is a passive index fund. The expense ratio is much less than compared to Active Mutual Funds. The Regular plan has an expense ratio of 1.00 % and the direct plan has an expense ratio of 0.36 %.
- It is very well diversified in 250 microcap companies across different sectors.
- It allows investors to invest in under-research stocks and high-growth potential stocks.
- It can give extraordinary returns to high-risk investors.
- Since the Microcap 250 index outperforms the small-cap index in the long and short term. This fund will outperform smallcap index funds returns.
Disadvantages of Motilal Oswal Nifty Microcap 250 Index Fund.
- This fund can be very volatile as prices of Microcap stocks keep fluctuating frequently.
- This fund may face liquidity problems as microcap stocks are low-capital stocks that have less liquidity.
- Microcap company’s products may fail to compete with large company’s well-established products. Large companies have better resources and research infrastructure.
- Microcap stocks have a high business failure ratio, so the Top 250 microcap companies change very frequently. This makes it difficult for a fund manager to follow that fund. Hence, “Tracking error” can be more common in these types of funds.
Conclusion
Investors should check their risk appetite before investing in this fund. Investors with high-risk appetites and fearless about market fluctuation should invest in this fund. This is for high-risk, high-reward investors. The investment period should be long-term (More than 5 Years). Investors can invest a small percentage of their total portfolio in Motilal Oswal Nifty Microcap 250 Index Fund. This will help investors to generate extra returns on investment. The returns of this fund will outperform the returns of the smallcap index.
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