BSE 200

About BSE 200 Index

S&P BSE 200 comprises the top 200 stocks that make up the ranking according to market capitalization and volume of trade on the BSE or the Bombay Stock Exchange. The changes in the BSE 200 share price affect the index's value. 

BSE 200 gives investors a more comprehensive picture of the market and accurately represents the Indian economy. In contrast, the Sensex solely tracks the price movements of the major players in various market sectors. When combined, these firms make up between 80 and 85% of the BSE market capitalization. Thus, investors can forecast the direction of the Indian economy by following the changes in the S&P BSE 200 index.

Criteria for Stock Inclusion

The companies in BSE 200 are added or deleted twice every year in June and December. A stock must meet the following requirements for inclusion in this index. 

• Businesses must be listed and traded on the BSE (for a minimum of six months).
• The companies need to be extremely liquid, meaning they need to have traded in 95% of BSE trading sessions over the previous six months.
• The firm's average market must exceed INR 5 billion.
• These businesses need to make money from their core operations.

How is BSE 200 Calculated?

The market capitalization of the BSE 200 stocks is determined using the float-adjusted methodology. A market valuation that has been adjusted for floating only takes into account the value of shares that are easily traded on the market. This means that while determining the index value, shares held by government agencies, promoters, employees, and others that are prohibited from free trading must be excluded.

To calculate the value of BSE 200, the free-float market capitalization of all the 200 companies is added. Then the value is adjusted with the base index value of 1989-90. So, the formula becomes, 

BSE 200 Share Price = Total Free-Float Market Capitalization x Base Index Value (1989-90)

                     Base Market Capitalization (1989-90)