BSE LargeCap

About BSE LargeCap Index Today

The Bombay Stock Exchange (BSE) categorizes companies based on their market capitalization into Large-Cap, Mid-Cap, and Small-Cap Segments, following the 18-15-5 rule. This rule designates the top 80% of the market cap companies as Large-Cap. Presently, there are 100 Large-Cap companies.

 The S&P BSE LargeCap index is designed to reflect 70% of the total market capitalization of the S&P BSE All Cap index. The value of this index fluctuates with changes in the BSE LargeCap share prices.

 Investing in BSE LargeCap companies often yields better returns due to their substantial market capitalization. This index is crucial for investors to make well-informed decisions and to understand the potential returns, as it includes the most actively traded stocks on the BSE.

Criteria to Select Stocks for BSE Large Cap Index

Key selection criteria are considered for the 30 constituent stocks, which make up the Sensex for the Large Cap Index, as follows: 

• The stock should be listed on BSE.
• This would be the stock of companies whose market capitalization ranges between INR 7,000-20,000 crores.
• Only somewhat liquid stocks will be considered.
• The company's revenues should first originate from the core activities of the business.
• The company should operate in sectors that would help to make sure that this is representative of the broader Indian equity market in a diversified and balanced manner.

Calculation of BSE LargeCap Index

The constituent companies of S&P BSE LargeCap are selected and ranked by the free-float market capitalization methodology.

The methodology of free-float market capitalization is quite unlike the weighted market capitalization method that was in use till recently. Free-float market capitalization considers only those shares that can be easily available for buying and selling at any given point in time. Thus, company insiders, government holdings, or other non-marketable shares are not considered for free-float market capitalization.

Free-float market capitalization may be calculated as below: 

Free-Float Market Capitalization = Market Capitalization × Free Float Factor 

In the formula above, market capitalization represents the total market value of the company, while the free float factor is the proportion of its shares that is available to the market for trading.

To calculate the share price of BSE LargeCap, the following formula will be used:

BSE LargeCap Share Price = Total Free-Float Market Capitalization × Base Index Value / Base Market Capitalization.