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Tata Mutual Fund will offer the Tata Nifty Midcap 150 Index Fund as a New Fund Offer (NFO), with the NFO period from June 2 to June 16, 2025. The New Fund Offer seeks to track the Nifty Midcap 150 TRI Index, which comprises the mid-cap 150 ranked companies (101 to 250 by market capitalization) in India. With this offering, Tata Asset Management seeks to expand investment in the midcap sector and exploit the midcap boom in India
What Is the Tata Nifty Midcap 150 Index Fund?
An index fund that passively replicates the Nifty Midcap 150 Index, this scheme invests in midcap companies across 20 sectors and more than 70 industries. The fund is actively managed by two seasoned fund managers, Mr. Kapil Menon and Mr. Rakesh Prajapati. Its setup enables investors to participate in the rapidly growing midcap segment of India while mitigating the volatility associated with active stock selection.
Why Focus on Midcaps?
1. Balanced Growth Potential
Midcaps offer the best blend of stability and high growth. They are more than small caps but less than large caps, which makes them ideal for long-term capital appreciation.
2. Greater Allocation to High-Growth Sectors
The Tata Nifty Midcap 150 Index Fund offers higher sector allocation in fast-growing sectors such as
- Capital Goods: 13.22%
- Healthcare: 11.73%
- Chemicals: 6.34%
- Consumer Durables, Textiles, Realty, and Media: 5.92%
These allocations are bound to outperform large-cap funds by a larger margin in these regions.
3. Emerging Market Leaders
Historically, 17 midcap companies have graduated to large caps in the last 5 years. This index fund allows investors to spot tomorrow’s blue chips today.
Key Features of the New Fund Offer
- Fund Type: Open-ended index fund
- Benchmark: Nifty Midcap 150 Total Return Index (TRI)
- NFO Period: 2nd June to 16th June 2025
- Minimum Investment: ₹5,000
- Exit Load: 0.25% of investment value, if redeemed within 15 days
This new fund offer is positioned as a cost-effective way to enter midcaps through a diversified route.
Sector & Industry Exposure: What makes this index fund unique?
This index fund opens up access to sectors and industries below ample cap coverage, such as
- Fintech
- Edible Oils
- Exchange Platforms
- Media and Entertainment
- Electrical Components
- Healthcare Analytics
Midcaps represent over 40% of areas undersupplied by large caps. This illustrates why the fund serves as a diversified bet on India’s economic development.
Historical Outcome of Investment in Midcap Index
| Period | Nifty Midcap 150 TRI | Nifty 100 TRI | Nifty 50 TRI |
| 1-Year Return | 21.89% | 16.91% | 16.37% |
| 3-Year Return | 15.80% | 12.69% | 12.38% |
| 5-Year Return | 15.77% | 12.72% | 12.32% |
| 10-Year Return | 16.06% | 12.52% | 12.00% |
Although midcaps are relatively more volatile, they have delivered higher long-term alpha, particularly through SIPs.
SIP Journey: Mid Cap Company Growth
If you had invested ₹10,000 every month from inception in the Nifty Midcap 150 Index:
- Amount by Apr 2025: ~₹24 Lakhs
- CAGR (XIRR): 17.35%
As compared to:
- Nifty 100 TRI: 13.36%
- Nifty 50 TRI: 13.05%
This data is a concrete argument for long-term approaches to SIPs in the Tata Nifty Midcap 150 Index Fund.
Valuation & Risk Perspective
Although the current 1-year forward P/E for the Nifty Midcap 150 is at 31.3x (above the 10-year average of 22.5x), midcaps have historically delivered strong returns following high-valuation phases. As always, “time in the market beats timing the market.”
Additionally, midcaps have been less influenced by FII flows due to higher promoter holding (~55%) and lower foreign ownership than large caps.
Who Should Invest in Tata Nifty Midcap 150 Index Fund?
This fund is suitable for:
- Long-term investors who seek capital appreciation
- Individuals inclined towards automatic index funds are positioned towards core parts of India’s growth.
- Investors who are profoundly interested in actively managed funds and shifts beyond large caps
- SIP-focused investors are aiming to benefit from compounding over time.
Given the broad exposure of this index fund, it can be an ideal core holding in a diversified portfolio.
Final Thoughts
With a clear focus on scalability, diversification, and sectoral growth, the Tata Nifty Midcap 150 Index Fund is a compelling New Fund Offer for those who believe in India’s midcap momentum. As India continues to expand its economic footprint, this index fund is designed to grow with it.
Remember: Always consult your financial advisor before making any investment decisions.
अक्सर पूछे जाने वाले प्रश्न (FAQs)
Q1. What is the Tata Nifty Midcap 150 Index Fund?
The Tata Nifty Midcap 150 index fund is an open-ended index fund that aims to replicate the performance of the Nifty Midcap 150 Total Return Index. It invests in the next 150 largest companies after the Nifty 100, offering exposure to India’s growing midcap segment.
Q2. Is Tata Nifty Midcap 150 a new fund offer?
Yes, the fund is currently available as a new fund offer (NFO) from 2nd June 2025 to 16th June 2025. This is your opportunity to enter the midcap space through a diversified, passive investment route.
Q3. What makes midcap index funds attractive?
Midcap index funds like Tata Nifty Midcap 150 offer a balance of growth and diversification. These funds invest in companies with scalable business models that are often in high-growth sectors like healthcare, chemicals, fintech, and capital goods.
Q4. What is the benchmark for the Tata Nifty Midcap 150 Index Fund?
The benchmark for this index fund is the Nifty Midcap 150 Total Return Index (TRI). It reflects the total return performance of India’s top mid-sized companies.
Q5. Is the Tata Nifty Midcap 150 Index Fund suitable for long-term investment?
Yes, it is ideal for long-term investors seeking capital appreciation. Historically, midcaps have outperformed large caps over 5–10 year horizons, making this new fund offer a compelling choice for SIPs.
Q6. What are the sectors covered by the Tata Nifty Midcap 150 Index Fund?
The fund covers 20 sectors and over 70 industries, including financial services, IT, healthcare, capital goods, and consumer durables, offering broader exposure than typical large-cap index funds.
Q7. What is the minimum investment amount in this New Fund Offer?
You can start investing in the Tata Nifty Midcap 150 Index Fund with a minimum of ₹5,000 and in multiples of ₹1 thereafter. Additional investments can be made with just ₹1,000.
Q8. How is the Tata Nifty Midcap 150 Index Fund different from other Tata Index Funds?
Unlike other Tata index funds that track large-cap indices like Nifty 50 or Nifty 100, this fund focuses specifically on mid-cap companies, offering access to high-growth, emerging businesses.
