About BSE Utilities Index

The utility sector is a section of a company that is involved in the production and distribution of infrastructural services. Utilities are the providers of mere amenities, such as electricity, natural gas, and water. It is an investment-intensive industry engrossed in improving the infrastructural facilities for the betterment of the country's inhabitants. 

The S&P BSE Utilities index is one of the sector-specific indices. It follows the price movement of those companies listed in the BSE AllCap and falling under the utility sector. The index value depicts the share prices of such utility companies and helps investors gauge the performance of the utility sector of the country.

History of BSE Utilities Index 

The S&P BSE Utilities Index was launched on February 25, 2022. Its value is calculated in real time, meaning it updates as the share prices of the companies in the index change. The index contains a total of 23 stocks with an average market cap of INR 537,193.24 million. It is tracked along INR and USD, with September 18, 2020, considered the base year for calculating the index. 

The BSE Utilities Index is calculated using the free-float market capitalization methodology. Given below are some of the rules that are implemented to avoid the situation of domination of a single stock in the index:

• No single stock can have more than 33% weight in the index.
• The sum of the weights of the top 3 stocks in the portfolio cannot exceed 63% on average.
• Stocks that climb above these ceilings distribute the excess weight equally over the remaining stocks in the index, thereby diluting that stock's contribution.