BSE Realty

About S&P BSE Realty Index

The real estate sector in India significantly contributes to the nation’s GDP, currently accounting for 6-7%, and is projected to reach 13% by 2025. The most important feature of this sector is not only its relation to economic health but also that it is a great employment provider, especially for the youth. S&P BSE Realty Index segments top companies of realty from the broader BSE 500 Index. This activity index hosts companies that are into the buying and selling of land, buildings, and other properties. It reflects the sector's real-time market performance. 

The Realty Index BSE was introduced on July 9, 2007. It calculates the stock values using a float-adjusted market capitalization method. The calculation takes into consideration the market capitalization of stocks adjusted by the free-float factor. As of now, the index has 10 stocks in its kitty, having an average market cap of INR 251,405.54 million. This index is rebalanced every six months in June and December by adding or removing stocks based on the performance of those specific stocks and meeting the criteria in maintaining its representation of market dynamics in the real estate sector.

Criteria to Select Stocks for Inclusion in S&P BSE Realty Index

Following is a set of criteria that needs to be fulfilled by a stock for inclusion in the BSE Realty Index:

• Be part of BSE 500: The share should already be a part of the BSE 500 Index, which comprises 500 leading stocks of Bombay Stock Exchange.
• Top 500 performers: Selection is based on average float-adjusted market capitalization during the last three months. Float-adjusted market capitalization means the value of shares available for public trading.
• Active Trading: The stock should have traded at least 90% of the trading days during the last three months. This ensures the selection of only those stocks for which regular trading activities are present. 

Calculation of S&P BSE Realty 

Qualified stocks are ranked by float-adjusted market capitalization. The top 10 companies, by ranking of float-adjusted market capitalization, are selected for the index.

Then, the float-adjusted market capitalization of all selected stocks is added together to arrive at the BSE Realty share price. Then it is divided by the market capitalisation of the base year and multiplied by 100. Here is the formula for the calculation of BSE Realty:

BSE Realty Share Price Today = Total Free - Float Market Capitalization × 100 / Base Market Capitalization