Page 68 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Unit 5: Securities and Exchange Board of India

are based; all major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the free- Notes
float methodology.

The growth of the equity market in India has been phenomenal in the present decade. Right
from early nineties, the stock market witnessed heightened activity in terms of various bull and
bear runs. In the late nineties, the Indian market witnessed a huge frenzy in the 'TMT' sectors.
More recently, real estate caught the fancy of the investors. SENSEX has captured all these
happenings in the most judicious manner. One can identify the booms and busts of the Indian
equity market through SENSEX. As the oldest index in the country, it provides the time series
data over a fairly long period of time (from 1979 onwards). Small wonder, the SENSEX has
become one of the most prominent brands in the country.
Specifications
Base Year 1978-79
Base Index Value 100
Date of Launch 01-01-1986
Method of calculation Launched on full market capitalization method and effective
September 01, 2003, calculation method shifted to free-float market
capitalization.
Number of scrips 30
BSE-100 Index

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.
Index Specification
Base Year 1983-84
Base Index Value 100
Date of Launch January 03, 1989

Method of calculation Launched on full market capitalization method and effective April
05, 2004, calculation method shifted to free-float market capitalization.
Number of scrips 100

BSE-200 Index

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 5,421 crores to 3,98,432 crores 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.

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