BSE changes methodology for indices

Reference period will increase from three months to six for rebalance of indices at BSE from December


As per the BSE’s new circular, a company must have traded for at least 80% of the trading days—unlike 75% of the trading days at present— before it is made a part of the index. Photo: Madhu Kapparath/ Hindustan Times
As per the BSE’s new circular, a company must have traded for at least 80% of the trading days—unlike 75% of the trading days at present— before it is made a part of the index. Photo: Madhu Kapparath/ Hindustan Times

New Delhi: Leading stock exchange BSE on Thursday said rebalancing of the indices—Sensex, BSE 100, BSE 200 and BSE 500—will depend on six months reference period from December onwards. Currently, rebalance in the indices are done on the basis of three months reference period. As per the new methodology, data collected for rebalance will be based on a six month reference period, BSE said in a circular.

The index is operated by Asia Index—an equal venture between S&P Dow Jones Indices LLC and BSE. Besides, the exchange said that constituents of BSE 500 will be considered as the eligible universe for BSE 200. Currently, all common equities listed at BSE (excluding companies classified in Z group, suspended companies, companies objected by the surveillance department of the exchange and those that are traded under a permitted category and on the SME platform) are considered eligible. For BSE 500, the exchange said that a minimum listing history of at least one month should be considered for an IPO to be part of the eligible universe of BSE 500.

Currently, there is no such criteria in this index. Besides, a company must have traded for at least 80% of the trading days at BSE during the six month reference period. At present, the firm should have traded for at least 75% of the trading days at exchange during the three month reference period. Regarding the BSE IPO and BSE SME IPO indices, the exchange said that a company will excluded from the index at the open of the Monday following the third Friday of the month after the completion of one year of listing.

Currently, two years of listing were required for the main bourse and three years for the SME platform. BSE said that constituent of PSU index will be decided on the basis of float market capitalisation instead of total market capitalisation.

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