Nifty Midcap150 Quality 50 stocks list

Only members of the Nifty Midcap 150 at the time of review are eligible, and each must have at least 1 year of listing history. When the index is reconstituted, the latest composition of the Nifty Midcap 150 is used, including changes that are announced but not yet in effect. A company that has gone through a scheme of arrangement, such as a capital restructuring, qualifies once it has traded for twelve calendar months on an ex basis.

Each eligible stock gets a Z score (its value minus the average of the eligible stocks, divided by their standard deviation) for return on equity (profit as a share of shareholders' equity), for the debt-to-equity ratio (borrowings against equity) and for EPS growth variability over the previous 5 years. Return on equity and debt-to-equity use the latest fiscal year. EPS growth variability uses adjusted EPS of the previous 6 years. Consolidated figures are used where available, otherwise standalone. A stock with negative EPS in any of those 6 years is not considered. A newly listed company is considered if its adjusted EPS is enough to measure EPS growth variability over at least 3 financial years.

For a company outside financial services, the weighted Z score is 0.33 times the Z score of return on equity, plus 0.33 times the negative of the Z score of debt-to-equity, plus 0.33 times the negative of the Z score of EPS growth variability. For a financial services company, debt-to-equity is left out: the score is 0.5 times the Z score of return on equity plus 0.5 times the negative of the Z score of EPS growth variability. The quality score is 1 plus the weighted Z score when that is above 0, and the inverse of (1 minus the weighted Z score) when it is below 0. The 50 stocks with the highest quality scores are selected.

A stock's weight is the square root of its free float market capitalization (the market value of the shares available for trading) multiplied by its quality score. Each stock is capped at the lower of 5% or 5 times its weight if the index were weighted by free float market capitalization alone. The cap is applied twice a year, at rebalancing.

The index is reconstituted twice a year, with changes effective from the last trading day of Jun and Dec. The 25 stocks with the highest quality scores must be included, and a current member whose rank falls beyond 75 must be removed. Apart from the scheduled review, the index is reconstituted and rebalanced ad hoc if a constituent is suspended, delisted or goes through a scheme of arrangement.

The index has a base date of 1 Apr 2005 and a base value of 1000. It was launched on 24 Oct 2019.