21Nov

SENSEX and NIFTY Calculation

Have you ever wondered what the SENSEX and NIFTY is? How are they calculated?

SENSEX i.e. Sensitive Index is the benchmark index of Bombay Stock Exchange (BSE) composed of 30 of the largest and most actively-traded stocks of BSE.

Calculation Method

BSE uses Free-Float methodology (multiplying the number of shares of top 30 companies with their respective equity’s price excluding locked in shares i.e. the ones hold by promoters, government and those having controlling interest in the concern) to calculate the index. For e.g. A company has 2 promoters X and Y and shares held by them are 1000 and 2000 respectively and to take a loan 1500 shares has been issued to government as a collateral. So 1000+2000+1500=4500 shares will be taken as locked in securities and all other shares are used to calculate SENSEX. Now question arises what is the process. Here it is –
Each company’s Market capitalization is determined (No. of shares x price)
Free float factor of company is determined by BSE. Free float factor (between 0.05-1.00) is a multiple by which company’s Market capitalization is multiplied to arrive at Free-float market capitalization. The factor is determined by details submitted by company. It is a kind of weightage given to companies. Say Capitalization is 36,00,000
Now Ratio and Proportion is used. How? Base index of 1978-79 is used. Index of 1978-79 is taken as 100. Say the Free-float market capitalization was 60,000 (may vary) at the time.
When the capitalization was 60,000 index was 100
When the capitalization is 36,00,000 index is 6000
So it means SENSEX is 6000

INDEX AS OF 20th SEPTEMBER 2013

Company Name Company Name Company Name
Bajaj Auto Ltd Hindustan Unilever Ltd Oil and Natural Gas Corporation Ltd
Bharat Heavy Electricals Ltd Housing Development Finance Corporation Ltd Reliance Industries Ltd
Bharti Airtel Ltd ICICI Bank Ltd Sesa Goa Ltd
Cipla Ltd Infosys Ltd State Bank of India
Coal India Ltd ITC Ltd Sun Pharmaceutical Industries Ltd
Dr.Reddy’s Laboratories Ltd Jindal Steel And Power Ltd Tata Consultancy Services Ltd
GAIL (India) Ltd Larsen & Toubro Ltd Tata Motors Ltd
HDFC Bank Ltd Mahindra and Mahindra Ltd Tata Power Company Ltd
Hero MotoCorp Ltd Maruti Suzuki India Ltd Tata Steel Ltd
Hindalco Industries Ltd NTPC Ltd Wipro Ltd
 
NIFTY 

i.e. National Stock Exchange Fifty is the benchmark index of National Stock Exchange (NSE) composed of 50 from of the largest and most actively-traded stocks of NSE. 50 Top stock are selected from 24 Sectors.

 

Calculation Method is just like BSE except the Base value is taken of year 1995 and is set to 1000 and base capital of Rs. 2.06 trillion is taken.

 

INDEX AS OF 20th SEPTEMBER 2013

Company Name Industry Symbol
ACC Ltd. CEMENT AND CEMENT PRODUCTS ACC
Ambuja Cements Ltd. CEMENT AND CEMENT PRODUCTS AMBUJACEM
Asian Paints Ltd. PAINTS ASIANPAINT
Axis Bank Ltd. BANKS AXISBANK
Bajaj Auto Ltd. AUTOMOBILES – 2 AND 3 WHEELERS BAJAJ-AUTO
Bank of Baroda BANKS BANKBARODA
Bharat Heavy Electricals Ltd. ELECTRICAL EQUIPMENT BHEL
Bharat Petroleum Corporation Ltd. REFINERIES BPCL
Bharti Airtel Ltd. TELECOMMUNICATION – SERVICES BHARTIARTL
Cairn India Ltd. OIL EXPLORATION/PRODUCTION CAIRN
Cipla Ltd. PHARMACEUTICALS CIPLA
Coal India Ltd. MINING COALINDIA
DLF Ltd. CONSTRUCTION DLF
Dr. Reddy’s Laboratories Ltd. PHARMACEUTICALS DRREDDY
GAIL (India) Ltd. GAS GAIL
Grasim Industries Ltd. CEMENT AND CEMENT PRODUCTS GRASIM
HCL Technologies Ltd. COMPUTERS – SOFTWARE HCLTECH
HDFC Bank Ltd. BANKS HDFCBANK
Hero MotoCorp Ltd. AUTOMOBILES – 2 AND 3 WHEELERS HEROMOTOCO
Hindalco Industries Ltd. ALUMINIUM HINDALCO
Hindustan Unilever Ltd. DIVERSIFIED HINDUNILVR
Housing Development Finance Corporation Ltd. FINANCE – HOUSING HDFC
I T C Ltd. CIGARETTES ITC
ICICI Bank Ltd. BANKS ICICIBANK
IDFC Ltd. FINANCIAL INSTITUTION IDFC
IndusInd Bank Ltd. BANKS INDUSINDBK
Infosys Ltd. COMPUTERS – SOFTWARE INFY
Jaiprakash Associates Ltd. CONSTRUCTION JPASSOCIAT
Jindal Steel & Power Ltd. STEEL AND STEEL PRODUCTS JINDALSTEL
Kotak Mahindra Bank Ltd. BANKS KOTAKBANK
Larsen & Toubro Ltd. ENGINEERING LT
Lupin Ltd. PHARMACEUTICALS LUPIN
Mahindra & Mahindra Ltd. AUTOMOBILES – 4 WHEELERS M&M
Maruti Suzuki India Ltd. AUTOMOBILES – 4 WHEELERS MARUTI
NMDC Ltd. MINING NMDC
NTPC Ltd. POWER NTPC
Oil & Natural Gas Corporation Ltd. OIL EXPLORATION/PRODUCTION ONGC
Power Grid Corporation of India Ltd. POWER POWERGRID
Punjab National Bank BANKS PNB
Ranbaxy Laboratories Ltd. PHARMACEUTICALS RANBAXY
Reliance Industries Ltd. REFINERIES RELIANCE
Reliance Infrastructure Ltd. POWER RELINFRA
Sesa Goa Ltd. MINING SESAGOA
State Bank of India BANKS SBIN
Sun Pharmaceutical Industries Ltd. PHARMACEUTICALS SUNPHARMA
Tata Consultancy Services Ltd. COMPUTERS – SOFTWARE TCS
Tata Motors Ltd. AUTOMOBILES – 4 WHEELERS TATAMOTORS
Tata Power Co. Ltd. POWER TATAPOWER
Tata Steel Ltd. STEEL AND STEEL PRODUCTS TATASTEEL
UltraTech Cement Ltd. CEMENT AND CEMENT PRODUCTS ULTRACEMCO

Comments

comments

Share this Story

About Chiranjiv Kumar

One comment

  1. Thanks to solve the mystery 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *

*

© Copyright 2016, All Rights Reserved