BSE Industrials

About BSE Industrial Index

Agriculture, industry, and service-based are the three main broad sectors in which economic activities can be categorized. Industries include manufacturing units with heavy capital investment in machinery. These sectors are labour-intensive and employ on a large scale. Thus, they form the base of the economic structure. Hence, industrial performance tends to have a strong effect on the overall market trend. Similarly, the BSE All Cap index categorizes stocks into 11 sectoral indices based on various macroeconomic indicators to assess the performance of various sectors in the market; amongst them, the S&P BSE Industrials index rightly tracks industrial stocks.

The S&P BSE Industrials index is an aggregate of all the industrial stocks in the BSE All Cap index, with its inception in April 2015. It is calculated in real-time and is available in INR as well as in USD. Currently, 223 manufacturing companies are included within this index, which is market-capitalization-weighted, free-float. Although the rank of the constituents is based on market capitalization, weights are value-added to the constituents. The index is rebalanced annually in September and reconstituted quarterly in March, June, and December. This index, the S&P BSE Industrials, helps investors and analysts understand the industrial health of the economy.

Calculation of BSE Industrials Index

The S&P BSE Industrials is one of the 11 sectoral indices that the BSE calculates to understand the effects of the individual sector’s performance on the markets. All the constituents of this index are selected from the BSE All Cap index. Hence, the basic rules for featuring in the BSE All Cap have to be followed by the constituents of S&P BSE Industrials also.

Unlike its benchmark index, the constituents of the S&P BSE Industrials index are weighted by a capped free-float market capitalization.  

• In particular, no company in the index should have weight more than 33%. 
• The combined weight of the three largest companies should not exceed 63%. 
• If these three weights exceed this value, the excess weight is distributed proportionally to the other index constituents.