Complete Guide to BSE SMALLCAP Index: Selection to Investment Process

The Smallcap segment in the stock market is one of the most popular segments as it offers higher growth, but at the same time comes with higher risk as well. Trading or investing in smallcap stocks requires in depth market knowledge, and precision. Here in this article will talk about the BSE Smallcap index which tracks smallcap companies. With this index you can have updated knowledge and idea about how the smallcaps are performing.  

This article will cover the BSE smallcap index’s constituents, performances, factors affecting the index, risks, and many such aspects that can help you understand the index and the overall segment in a better way. 

BSE SMALLCAP Index – Overview & Constituents 

The BSE Smallcap index tracks the performance of the stocks constituting the end 15% of the market capitalization of the BSE Allcap’s universe. This index is a massive index comprising of 973 stocks. You can find the complete list of all the stocks as of 8 July 2025 here. 

BSE Smallcap Constituents List

The top ten stocks by weightage – 

Sectoral Weightage 

Selection Criteria

BSE Smallcap index is a broad index having more than 100 stocks. So, for this index, the selection criteria are quite simple, and that is just going by the market capitalisation. The average daily total market capitalisation is taken into consideration for picking the stocks. The stocks are sorted in descending order of market capitalisation and the 15% stocks from the top are chosen.   

Factors Affecting the BSE SMALLCAP Index

The factors that affect the BSE Smallcap index include – 

• Economic Factors: When the economy is booming, the Smallcap stocks booms as well owing to more investments, demand, and this helps the companies earn more profits, which takes the index higher. However, when the economy slows down, Smallcap stocks are hit as well, significantly making the index volatile. 
• Government policies: The connection between government policies and the Smallcap segment is inevitable. When the policies are pro-economic growth, especially fuelling the economy, then the Smallcap segments grow significantly, which in turn helps the index grow in value and vice versa. 
• Interest rates: Interest rates also determine the course of the BSE Smallcap index. When the rates are slashed, the markets rise, and Smallcap stocks rise significantly. This takes the index higher, and when the interests are high, the loans are expensive, then the Smallcap segment becomes sluggish too fast, taking a toll on the index value.

BSE SMALLCAP Index Calculation Method

For the BSE Smallcap index, the stocks are selected based on average daily market capitalisation. 

For assigning weights, the float-adjusted market capitalisation is used, and then the following formula is used to derive the index value. 

BSE Smallcap Index Value = Index Market Value / Divisor

Performance and Returns (As on 30 June 2025)

Here are the returns for different periods – 

Enjoy investing in the top stocks of the BSE Allcap universe with the BSE Smallcap index on the Shoonya App!

Risk and Volatility (As on 30 June 2025)

Here are the details of Annualised Risk and Annualised Risk-adjusted Return generated by the index – 

How to Invest in the BSE SMALLCAP INDEX?

You can invest in the BSE Smallcap Index using ETFs, index funds, or you can trade them on the trading platform. You can also trade BSE Smallcap Index futures and options in the F&O section of Shoonya’s app. To do so, you have to add the index to your watchlist following these steps – 

• Open the Shoonya app.
• Head to the “Watchlist” tab located at the bottom of your screen.
• In the search bar, type “NIFTY IN” or “SENSEX IN” and add it to the watch list, and then you will be able to see the indices.
• Once you find your desired index, click on the add option given on the right side.
• Now you can see the index on the watchlist. 

Conclusion

Thus, the BSE Smallcap Index can be of great help to the investors and traders trying to explore the smallcap segment of the stock market. It will not only help them understand how the stocks are performing, but also helps in analysing the risk factors and accordingly one can take their investment decisions.  

BSE Smallcap Index | FAQs

Source: Bse

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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.