BSE INDICES

For the premier stock exchange that pioneered the securities transaction business in India, over a century of experience is a proud achievement. A lot has changed since 1875 when 318 persons by paying a then princely amount of Re. 1, became members of what today is called Bombay Stock Exchange Limited (BSE).

Over the decades, the stock market in the country has passed through good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there was no measure or scale that could precisely measure the various ups and downs in the Indian stock market. BSE, in 1986, came out with a Stock Index-SENSEX- that subsequently became the barometer of the Indian stock market.

The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock exchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE National Index was renamed BSE-100 Index from October 14, 1996 and since then, it is being calculated taking into consideration only the prices of stocks listed at BSE. BSE launched the dollar-linked version of BSE-100 index on May 22, 2006.

With a view to provide a better representation of the increasing number of listed companies, larger market capitalization and the new industry sectors, BSE launched on 27th May, 1994 two new index series viz., the 'BSE-200' and the 'DOLLEX-200'. Since then, BSE has come a long way in attuning itself to the varied needs of investors and market participants. In order to fulfill the need for still broader, segment-specific and sector-specific indices, BSE has continuously been increasing the range of its indices. BSE-500 Index and 5 sectoral indices were launched in 1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECk Index. Over the years, BSE shifted all its indices to the free-float methodology (except BSE-PSU index).

BSE disseminates information on the Price-Earnings Ratio, the Price to Book Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its major indices.

The values of all BSE indices are updated on real time basis during market hours and displayed through the BOLT system, BSE website and news wire agencies.

All BSE Indices are reviewed periodically by the BSE Index Committee. This Committee which comprises eminent independent finance professionals frames the broad policy guidelines for the development and maintenance of all BSE indices. The BSE Index Cell carries out the day-to-day maintenance of all indices and conducts research on development of new indices.
 
 

SENSEX Calculation Methodology 

SENSEX is calculated using the "Free-float Market Capitalization" methodology, wherein, the level of index at any point of time reflects the free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization.

The base period of SENSEX is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX on a continuous basis.

Dollex-30

BSE also calculates a dollar-linked version of SENSEX and historical values of this index are available since its inception. (For more details click 'Dollex series of BSE indices')

SENSEX - Scrip Selection Criteria

The general guidelines for selection of constituents in SENSEX are as follows:  

1. Listed History:The scrip should have a listing history of at least 3 months at BSE. Exception may be considered if full market capitalization of a newly listed company ranks among top 10 in the list of BSE universe. In case, a company is listed on account of merger/ demerger/ amalgamation, minimum listing history would not be required.
    
2. Trading Frequency:The scrip should have been traded on each and every trading day in the last three months at BSE. Exceptions can be made for extreme reasons like scrip suspension etc.
    
3. Final Rank:The scrip should figure in the top 100 companies listed by final rank. The final rank is arrived at by assigning 75% weightage to the rank on the basis of three-month average full market capitalization and 25% weightage to the liquidity rank based on three-month average daily turnover & three-month average impact cost.
    
4. Market Capitalization Weightage:The weightage of each scrip in SENSEX based on three-month average free-float market capitalization should be at least 0.5% of the Index.
    
5. Industry/Sector Representation:Scrip selection would generally take into account a balanced representation of the listed companies in the universe of BSE.
    
6. Track Record:In the opinion of the BSE Index Committee, the company should have an acceptable track record.

History of Replacements in SENSEX
 

Date	Scrip Code	Scrips Excluded	Scrip Code	Scrips Included
8/3/1992	600	Zenith Ltd.	493	Bharat Forge Ltd.
8/19/1996	102	Ballarpur Industries Ltd.	101	Arvind Mills Ltd.
	493	Bharat Forge Ltd.	490	Bajaj Auto Ltd.
	20	Bombay Dyeing & Mfg. Co. Ltd.	103	Bharat Heavy Electricals Ltd.
	878	Ceat Tyres Ltd.	390	BSES Ltd.
	40	Century Textiles & Industries Ltd.	830	Colgate-Palmolive (India) Ltd.
	690	Gujarat State Fertilizers & Chemicals Ltd.	425	Gujarat Ambuja Cements Ltd.
	500	Hind. Motors	104	HPCL
	720	Indian Organic	15	ICICI
	303	Indian Rayon	116	IDBI
	480	Kirloskar Cummins	105	IPCL
	460	Mukand Iron	108	MTNL
	560	Phlips	359	Ranbaxy Lab.
	540	Premier Auto	112	State Bank of India
	550	Siemens	113	Steel Authority of India
	575	Voltas	770	Tata Chemicals
11/16/1998	101	Arvind Mills	870	Castrol
	620	G. E. Shipping	209	Infosys Technologies
	105	IPCL	304	NIIT Ltd.
	113	Steel Authority of India	672	Novartis
4/10/2000	116	I.D.B.I	124	Dr. Reddy’s Laboratories
	850	Indian Hotels	364	Reliance Petroleum
	770	Tata Chem	376	Satyam Computers
	400	Tata Power	5537	Zee Telefilms
1/8/2001	672	Novartis (I) Ltd.	87	Cipla Ltd.
1/7/2002	500304	NIIT Ltd.	532281	HCL Technologies
	500520	Mahindra & Mahindra	500182	Hero Honda Motors Ltd.
5/31/2002	500015	ICICI Ltd.	532174	ICICI Bank Ltd.
10/10/2002	500364	Reliance Petroleum Ltd.	500010	HDFC Ltd.
11/10/2003	500870	Castrol India Ltd.	532454	Bharti-Tele-Ventures Ltd.
	500830	Colgate-Palmolive (India) Ltd.	500180	HDFC Bank Ltd.
	500660	Glaxo Smithkline Pharma. Ltd.	500312	ONGC Ltd.
	532281	HCL Technologies Ltd.	500400	Tata Power Company Ltd.
	500790	Nestle (India) Ltd.	507685	Wipro Ltd.
5/19/2004	500510	Larsen & Toubro Ltd.	532500	Maruti Udyog Ltd.
9/27/2004	500108	Mahanagar Telephone Nigam Ltd.	500510	Larsen & Toubro Ltd.
6/6/2005	500104	Hindustan Petroleum Corp Ltd.	532555	National Thermal Power Corpn. Ltd.
	505537	Zee Telefilms Ltd.	532540	Tata Consultancy Services Ltd.
6/12/2006	500400	Tata Power Ltd.	532712	Reliance Communication Ltd.
7/9/2007	500182	Hero Honda Motors Ltd.	500520	Mahindra & Mahindra Ltd.
11/19/2007	500124	Dr. Reddy's Laboratories Ltd.	532868	DLF Ltd.
3/14/2008	500490	Bajaj Auto Ltd.	532532	Jaiprakash Associates Ltd.
7/28/2008	500425	Ambuja Cements Ltd.	500900	Sterlite Industries Ltd.
	500087	Cipla Ltd.	500400	Tata Power Co. Ltd.
1/12/2009	500376	Satyam Computers Ltd.	524715	Sun Pharmaceutical Industries Ltd.
6/29/2009	500359	Ranbaxy Laboratories Ltd.	500182	Hero Honda Motors Ltd.

Understanding Free-float Methodology

Concept

Free-float methodology refers to an index construction methodology that takes into consideration only the free-float market capitalization of a company for the purpose of index calculation and assigning weight to stocks in the index. Free-float market capitalization takes into consideration only those shares issued by the company that are readily available for trading in the market. It generally excludes promoters' holding, government holding, strategic holding and other locked-in shares that will not come to the market for trading in the normal course. In other words, the market capitalization of each company in a free-float index is reduced to the extent of its readily available shares in the market.

Subsequently all BSE indices with the exception of BSE-PSU index have adopted the free-float methodology.

Major advantages of Free-float Methodology

• A Free-float index reflects the market trends more rationally as it takes into consideration only those shares that are available for trading in the market.
   
• Free-float Methodology makes the index more broad-based by reducing the concentration of top few companies in Index.
   
• A Free-float index aids both active and passive investing styles. It aids active managers by enabling them to benchmark their fund returns vis-Ã -vis an investible index. This enables an apple-to-apple comparison thereby facilitating better evaluation of performance of active managers. Being a perfectly replicable portfolio of stocks, a Free-float adjusted index is best suited for the passive managers as it enables them to track the index with the least tracking error.
   
• Free-float Methodology improves index flexibility in terms of including any stock from the universe of listed stocks. This improves market coverage and sector coverage of the index. For example, under a Full-market capitalization methodology, companies with large market capitalization and low free-float cannot generally be included in the Index because they tend to distort the index by having an undue influence on the index movement. However, under the Free-float Methodology, since only the free-float market capitalization of each company is considered for index calculation, it becomes possible to include such closely-held companies in the index while at the same time preventing their undue influence on the index movement.
   
• Globally, the Free-float Methodology of index construction is considered to be an industry best practice and all major index providers like MSCI, FTSE, S&P and STOXX have adopted the same. MSCI, a leading global index provider, shifted all its indices to the Free-float Methodology in 2002. The MSCI India Standard Index, which is followed by Foreign Institutional Investors (FIIs) to track Indian equities, is also based on the Free-float Methodology. NASDAQ-100, the underlying index to the famous Exchange Traded Fund (ETF) - QQQ is based on the Free-float Methodology.  
   

Definition of Free-float

Shareholding of investors that would not, in the normal course come into the open market for trading are treated as 'Controlling/ Strategic Holdings' and hence not included in free-float. Specifically, the following categories of holding are generally excluded from the definition of Free-float:

• Shares held by founders/directors/ acquirers which has control element
   
• Shares held by persons/ bodies with "Controlling Interest"
   
• Shares held by Government as promoter/acquirer
   
• Holdings through the FDI Route
   
• Strategic stakes by private corporate bodies/ individuals
   
• Equity held by associate/group companies (cross-holdings)
   
• Equity held by Employee Welfare Trusts
   
• Locked-in shares and shares which would not be sold in the open market in normal course.
   

The remaining shareholders fall under the Free-float category.

Determining Free-float Factors of Companies

BSE has designed a Free-float format, which is filled and submitted by all index companies on a quarterly basis. (Format available on www.bseindia.com). BSE determines the Free-float factor for each company based on the detailed information submitted by the companies in the prescribed format. Free-float factor is a multiple with which the total market capitalization of a company is adjusted to arrive at the Free-float market capitalization. Once the Free-float of a company is determined, it is rounded-off to the higher multiple of 5 and each company is categorized into one of the 20 bands given below. A Free-float factor of say 0.55 means that only 55% of the market capitalization of the company will be considered for index calculation.

Free-float Bands:  

 

% Free-Float	Free-Float Factor	% Free-Float	Free-Float Factor
>0 - 5%	0.05	>50 - 55%	0.55
>5 - 10%	0.10	>55 - 60%	0.60
>10 - 15%	0.15	>60 - 65%	0.65
>15 - 20%	0.20	>65 - 70%	0.70
>20 - 25%	0.25	>70 - 75%	0.75
>25 - 30%	0.30	>75 - 80%	0.80
>30 - 35%	0.35	>80 - 85%	0.85
>35 - 40%	0.40	>85 - 90%	0.90
>40 - 45%	0.45	>90 - 95%	0.95
>45 - 50%	0.50	>95 - 100%	1.00

Index Closure Algorithm

The closing SENSEX on any trading day is computed taking the weighted average of all the trades on SENSEX constituents in the last 30 minutes of trading session. If a SENSEX constituent has not traded in the last 30 minutes, the last traded price is taken for computation of the Index closure. If a SENSEX constituent has not traded at all in a day, then its last day's closing price is taken for computation of Index closure. The use of Index Closure Algorithm prevents any intentional manipulation of the closing index value.

Maintenance of SENSEX

One of the important aspects of maintaining continuity with the past is to update the base year average. The base year value adjustment ensures that replacement of stocks in Index, additional issue of capital and other corporate announcements like 'rights issue' etc. do not destroy the historical value of the index. The beauty of maintenance lies in the fact that adjustments for corporate actions in the Index should not per se affect the index values.

The BSE Index Cell does the day-to-day maintenance of the index within the broad index policy framework set by the BSE Index Committee. The BSE Index Cell ensures that SENSEX and all the other BSE indices maintain their benchmark properties by striking a delicate balance between frequent replacements in index and maintaining its historical continuity. The BSE Index Committee comprises of capital market expert, fund managers, market participants and members of the BSE Governing Board.

On-Line Computation of the Index

During trading hours, value of the Index is calculated and disseminated on real time basis. This is done automatically on the basis of prices at which trades in Index constituents are executed.

Adjustment for Bonus, Rights and Newly Issued Capital

SENSEX calculation needs to be adjusted for issue of Bonus or Rights shares If no adjustments were made, a discontinuity would arise between the current value of the index and its previous value despite the non-occurrence of any economic activity of substance. At the BSE Index Cell , the base value is adjusted, which is used to alter market capitalization of the component stocks to arrive at the SENSEX value.

The BSE Index Cell keeps a close watch on the events that might affect the index on a regular basis and carries out daily maintenance of all the 19 Indices.

• Adjustments for Rights Issues
  When a company, included in the compilation of the index, issues right shares, the free-float market capitalization of that company is increased by the number of additional shares issued based on the theoretical (ex-right) price. An offsetting or proportionate adjustment is then made to the Base Market capitalization (see 'Base Market capitalization Adjustment' below).
   
• Adjustments for Bonus Issue
  When a company, included in the compilation of the index, issues bonus shares, the market capitalization of that company does not undergo any change. Therefore, there is no change in the Base Market capitalization, only the 'number of shares' in the formula is updated.
   
• Other Issues
  Base Market capitalization adjustment is required when new shares are issued by way of conversion of debentures, mergers, spin-offs etc. or when equity is reduced by way of buy-back of shares, corporate restructuring etc.
   
• Base Market capitalization Adjustment

The formula for adjusting the Base Market capitalization is as follows:

                                                                                                   New Market capitalization
New Base Market capitalization = Old Base Market capitalization x --------------------------------------- 
                                                                                                   Old Market capitalization 

To illustrate, suppose a company issues right shares which increases the market capitalization of the shares of that company by say, Rs.100 crores. The existing Base Market capitalization (Old Base Market capitalization), say, is Rs.2450 crores and the aggregate market capitalization of all the shares included in the index before the right issue is made is, say Rs.4781 crore. The "New Base Market capitalization " will then be:

2450 x (4781+100)  
-------------------------- = Rs.2501.24 crores
         4781 

This figure of Rs. 2501.24 crore will be used as the Base Market capitalization for calculating the index number from then onwards till the next base change becomes necessary.

Index Review Frequency

The BSE Index Committee meets every quarter to discuss index related issues. In case of a revision in the Index constituents, the announcement of the incoming and outgoing scrips is made six weeks in advance of the actual implementation of the revision of the Index.
 
For more details, please visit www.bseindia.com. 
 
 

OTHER INDICES
 
BSE-100 Index

Introduction

A broad-based index, the BSE-100 was formerly known as the BSE National index.  This Index has 1983-84 as the base year and was launched in 1989.  In line with the shift of the BSE Indices to the globally accepted Free-Float methodology, BSE-100 was shifted to Free-Float methodology effective from April 5, 2004.  The method of computation of Free-Float index and determination of free-float factors is similar to the methodology for SENSEX.

Base Year

The financial year 1983-84 has been chosen as the base year. The price stability during that year and proximity to the index series were the main consideration for choice of 1983-84 as the base year.  The base value was fixed at 100 points.

Dollex-100

BSE also calculates a dollar-linked version of SENSEX and historical values of this index are available since its inception. (For more details click 'Dollex series of BSE indices')

BSE-100 index - Scrip Selection Criteria

The general guidelines for selection of constituents in BSE-100 are as follows:

1. Trading Frequency: The scrip should have been traded on 95% of the trading days in the last three months. Exceptions can be made for extreme reasons like scrip suspension etc.
2. Final Rank: The scrip should figure in the top 200 companies listed by final rank. The final rank is arrived at by assigning 75% weightage to the rank on the basis of three-month average full market capitalization and 25% weightage to the liquidity rank based on three-month average daily turnover & three-month average impact cost.
3. Industry/Sector Representation: Scrip selection would generally take into account a balanced sectoral representation of the listed companies in the universe of BSE.
4. Track Record: In the opinion of the BSE Index Committee, the company should have an acceptable track record.

For more details, please visit www.bseindia.com.
 
  

BSE-200 Index

Background

Over the years, the number of companies listed on BSE continued to register a phenomenal increase; from 992 in to over 3,200 companies by March 1994, with combined market capitalization rising from Rs.5,421 crore to Rs. 3,98,432 crore as on 31st March, 1994.

Though SENSEX (1978-79=100) was serving the purpose of quantifying the price movements as also reflecting the sensitivity of the market in an effective manner, the rapid growth of the market necessitated compilation of a new broad-based index series reflecting the market trends in a more effective manner and providing a better representation of the increased equity stocks, market capitalization as also to the new industry groups. As such, BSE launched on 27th May 1994, two new index series-BSE-200 and Dollex-200.

The equity shares of 200 selected companies from the specified and non-specified lists of BSE were considered for inclusion in the sample for `BSE-200'. The selection of companies was primarily been done on the basis of current market capitalization of the listed scrips. Moreover, the market activity of the companies as reflected by the volumes of turnover and certain fundamental factors were considered for the final selection of the 200 companies.

Choice of Base Year

The financial year 1989-90 was chosen as the base year because of the price stability exhibited during that year and due to its proximity to the current period.

Dollex-200

BSE also calculates a dollar-linked version of BSE-200 index and historical values of this index are available since its inception. (For more details click 'Dollex series of BSE indices')

BSE-200 index - Scrip Selection Criteria

The general guidelines for selection of constituents in BSE-200 are as follows:

1. Trading Frequency: The scrip should have been traded on 90% of the trading days in the last three months. Exceptions can be made for extreme reasons like scrip suspension etc.
2. Final Rank: The scrip should figure in the top 350 companies listed by final rank. The final rank is arrived at by assigning 75% weightage to the rank on the basis of three-month average full market capitalization and 25% weightage to the liquidity rank based on three-month average daily turnover & three-month average impact cost.
3. Industry/Sector Representation: Scrip selection would generally take into account a balanced sectoral representation of the listed companies in the universe of BSE.
4. Track Record: In the opinion of the BSE Index Committee, the company should have an acceptable track record.

For more details, please visit www.bseindia.com.
 
 

All BSE indices reflects the growth in market value of constituent stocks over the base period in Rupee terms. A need was felt to design a yardstick by which these growth values are also measured in Dollar terms. Such an index would reflect, in one value, the changes in both the stock prices and the foreign exchange variation.

This was facilitated by the introduction of a dollar-linked index in which the formula for calculation of index is suitably modified to express the current and base market values in dollar terms. The scope for dollar-linked index emerged from the background of Indian equity markets increasingly getting integrated with global capital markets and the need to assess the market movements in terms of international benchmarks. The dollar-linked indices are useful to overseas investors, as it helps them measure their 'real returns' after providing for exchange rate fluctuations.

Dollex-30, a dollar-linked version of SENSEX, was launched on July 25, 2001 whereas Dollex-200, a dollar-linked version of BSE-200 was launched on May 27, 1994. These indices were initially calculated at the end of the trading session by taking into consideration day's rupee/ US$ reference rate as announced by India 's Central Bank i.e. Reserve Bank of India.

BSE introduced Dollex-100, a dollar linked version of BSE-100, on May 22, 2006.

Dollex-30, Dollex-100 and Dollex-200 are calculated and displayed through BSE On-line trading terminals (BOLT) by taking into account real-time Re./US$ Exchange rate. The formula for calculating the index is:

BSE-500 Index

Bombay Stock Exchange Limited constructed a new index, christened BSE-500, consisting of 500 scrips w.e.f. August 9, 1999. The changing pattern of the economy and that of the market were kept in mind while constructing this index.

BSE-500 index represents nearly 93% of the total market capitalization on BSE. BSE-500 covers all 20 major industries of the economy. In line with other BSE indices, effective August 16, 2005 calculation methodology was shifted to the free-float methodology.

Selection of the Base Year and Base Index Value:

The base date was fixed after a detailed analysis of the relative volatility of BSE-200, the index closest to BSE-500, over the last 8 years. The coefficient of variation of BSE-200 for 1998-99 was one of the lowest in this period. Hence, 1998-99 was chosen as the base year, and within this, February 1, 1999 was selected as the base date for its proximity to the current period. The base value was fixed at 1000 points in order to keep the index comparable with other similar indices.

BSE-500 index - Scrip Selection Criteria:

The general guidelines for selection of constituents in BSE-500 are as follows:

1. Trading Frequency: The scrip should have been traded on 75% of the trading days in the last three months. Exceptions can be made for extreme reasons like scrip suspension etc.
2. Final Rank: The scrip should figure in the top 750 companies listed by final rank. The final rank is arrived at by assigning 75% weightage to the rank on the basis of three-month average full market capitalization and 25% weightage to the liquidity rank based on three-month average daily turnover & three-month average impact cost.
3. Industry/Sector Representation: Scrip selection would generally take into account a balanced representation of the listed companies in the universe of BSE.
4. Track Record: In the opinion of the BSE Index Committee, the company should have an acceptable track record.

For more details, please visit www.bseindia.com.
 
 

BSE IPO Index

Introduction

BSE introduced the new index series - BSE IPO index to track the current primary market conditions in the Indian capital market and measure the growth in investor’s wealth within a period of two years after listing of a company subsequent to successful completion of initial public offering (IPO).

Robust growth of the Indian economy, 6.7% in 2008-09, and the expectation of higher growth in the future are expected to boost the primary market. For this and other reasons, it was an appropriate time to introduce to the market an indicator that will track primary market conditions in the Indian capital market.

BSE on August 24, 2009 announced the launch of BSE IPO index to track the value of companies for two years after listing subsequent to successful completion of their initial public offering (IPO).

BSE continued to introduce index innovations with the launch of the IPO index, by introducing ceiling (capping) on weightings of index constituents. Market capitalisation weightings of index constituents is limited to 20%. If a constituent’s market capitalization results in a higher weighting, the company’s weight is suitably adjusted to ensure that all constituents are restricted to 20% in the index. However, between any rebalancing, weightage of any index constituent can exceed 20%.

Criteria governing BSE IPO Index:

1. Company seeking listing on the Exchange after completion of IPO shall be considered eligible for inclusion in the index.  Follow-on public issue shall be considered ineligible for inclusion in the index

2. A scrip must have minimum free-float market capitalisation of Rs. 100 crores on first day of listing

3. A scrip will be included in the index on third day of its listing subject to fulfillment of minimum free-float market capitalisation criteria stated above

4. A scrip will be excluded from the index on second Monday of the month after completion of two years of listing

5. At all time minimum of 10 scrips shall be maintained in the index.  In case, there are less than 10 companies on account of possible exclusion after two years, the exclusion of such company shall be delayed till such time new inclusion is made in the index

6. Maximum weight of any scrip shall be capped at 20%.  The constituent weightage shall be reviewed at the time of inclusion/ exclusion of a scrip and on monthly rebalancing.  However, between any rebalancing, weightage of any index constituent can exceed 20%

For more details, please visit www.bseindia.com.
 
 

BSE TECk Index

Introduction

The decade of 1990s saw the emergence of the TMT sector as a major force in the Indian economy. The remarkable growth of this sector was reflected in the financial markets.

Going by the trading pattern, around 19% of the turnover on the stock exchanges is taking place in TMT sector stocks. These stocks collectively account for 15% of the total market capitalization. The investment interest in technology stocks continues unabated.

Recognizing the growing importance of the TMT sector, BSE TECk index was launched in 2001.

Scrip Selection Criteria for BSE TECk Index

Eligible universe

Scrips classified under information technology, media and telecom sectors that are present constituents of BSE-500 index form the eligible universe.

Trading Frequency

Scrips should have a minimum trading frequency of 90% in preceding three months.

Market capitalization

Scrips with a minimum of 90% market capitalization coverage in each sector based on free-float final rank form the index.

Buffers

A buffer of 2% both for inclusion and exclusion in the index is considered so that movements in and out of the index are minimized. For example, a company can be included in the index only if it falls within 88% coverage and an existing index constituent cannot be excluded unless it falls above 92% coverage. However, the above buffer criterion is applied only after the minimum 90% market coverage is satisfied.
 
For more details, please visit www.bseindia.com.
 
 

BSE PSU Index

Bombay Stock Exchange Limited launched "BSE PSU Index" on 4 June 2001. This index consists of major Public Sector Undertakings listed on BSE. The BSE PSU Index is displayed on-line on the BOLT trading terminals nationwide.

Objective:

The Base Date for the BSE PSU Index is 1st February 1999, the date when the BSE-500 was launched. Being a subset of BSE-500, the BSE PSU Index ensures a reasonable history of how the Central Government wealth fluctuated on the bourses. The Base Value for the BSE PSU Index has been set at 1000 to ensure adequacy in terms of daily index movement.

Scrip selection criteria for BSE PSU Index

For consideration of scrips for inclusion in BSE PSU index, Public Sector Undertaking refers to any undertaking wherein the Central Government holding is equal to or more than 51%. Since BSE PSU index is a subset of BSE-500 index, scrips that form part of BSE-500 index automatically get included in BSE PSU index.
 
For more details, please visit www.bseindia.com.
 
 

BSE Mid-Cap and BSE Small-Cap Index

BSE introduced the new index series called 'BSE MID-Cap' index and 'BSE Small-Cap' index to track the performance of companies with relatively smaller market capitalization.

BSE-500 Index - represents more than 93% of the listed universe. Companies with large market capitalization bias the movement of BSE-500 index. This necessitated construction of a separate indicator to capture the trend in companies with lower market capitalization. Over the years, BSE Mid-Cap and BSE Small-Cap indices have proven to be a great utility to the investing community.

BSE Mid-Cap and BSE Small-Cap Index - Scrip Selection Criteria:

The general guidelines for selection of constituents in BSE Mid-Cap & BSE Small-Cap Index are as follows:

1. Trading Frequency: The scrip should have been traded on 60% of the trading days in the last three months

2. Eligible universe shall comprise of companies aggregating 98.5% of average market capitalization

3. This list shall be categorixed under large-cap, mid-cap and small-cap segment based on 80%-15%-5% market capitalization coverage respectively

4. BSE Mid-Cap Index shall comprise of scrips that gives market capitalization coverage between 80% & 95% from the list derived as per point no.3 above

5. BSE Small-Cap Index shall comprise of scrips that gives market capitalization coverage between 95% & 100% from the list derived as per pont no.3 above

6. Quarterly review of these indices shall be carried out as per the above criteria subject to a buffer of 3%

For more details, please visit www.bseindia.com.