Page 72 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Unit 5: Securities and Exchange Board of India

Objective Notes

1. An Index to track the performance of listed equity of PSU companies.
2. A suitable benchmark for the Central Government to monitor its wealth on the bourses.
Index Specification
Base Year February 01, 1999

Base Index Value 1000
Date of Launch June 04, 2001
Method of calculation Full market capitalization method
Number of scrips All PSU stocks in BSE-500 index

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.
Specification

Base Year 2002-03
Base Index Value 1000
Date of Launch April 11, 2005
Method of calculation Free-float market capitalization method

Number of scrips Variable
BSE IPO Index

On August 24, 2009, Bombay Stock Exchange today announced the launch of BSE IPO index that
will track the value of companies for two years after listing subsequent to successful completion
of their Initial Public Offering (IPO).
IPO index has been introduced with expectations of robust growth of the Indian economy to
boost the primary market and to introduce an indicator that will track primary market conditions
in the Indian capital market.
According to guidelines issued by BSE, a company seeking listing on the exchange after
completion of IPO shall be considered eligible for inclusion in the index, but follow-on public
issues shall not be considered for inclusion.
A scrip must have the minimum free-float market capitalisation of 100 crores on its first day of
listing and will be included in the index on the third day of its listing. A scrip will be excluded
from the index on the second Monday of the month after completion of two years of listing.
At all time a 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.

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