S&P BSE Financial Services

S&P BSE Financial Services Index

BSE Finance is a sectoral index on the Bombay Stock Exchange (BSE) that measures the performance of the Indian finance sector. It is a real-time index of 127 stocks representing the finance sector in the S&P BSE AllCap index. The index was launched on February 25, 2022, and has since breached levels of 7,500 at approximately 18.69x P/E multiples. The index value is calculated based on free-float capped market capitalisation value, with index stocks capped at 33%. BSE Finance is reconstituted annually in September, with July's last trading day as its reference date. The index is managed and governed by the S&P BSE Index Committee, set up under Asia Index Private Ltd, a joint venture of S&P and BSE Ltd. The index is calculated in INR and USD, with spot foreign exchange rates applied from Refinitiv's data.

How is the BSE Finance Services Index Calculated?

This formula is used to calculate the BSE financial services index value:

Index value = Index Market Value / Divisor

The BSE Finance index is reconfigured every September. The index cap weightings are reviewed quarterly in December, March, and June. The maximum weight for a single stock is 33%, and the maximum weight for the top three components is 63%. The stock rankings must be consistent for every index component, whether they are determined by their free-float market capitalization or final weights.

How are Stocks selected to be Listed on BSE Finance?

The BSE financial services share price is calculated by applying the S&P Dow Jones equity indices' divisor methodology to weigh its 127 stocks according to free-float capped market capitalization. In this capped-weighted index method, a single stock can have a maximum weight of 33%. Any excess weight is then allocated proportionately among the remaining index stocks.

BSE Finance Index Eligibility Criteria:

• Domicile in India and listed on the Bombay Stock Exchange.

• Part of S&P BSE AllCap index.

• Part of the Finance sector as per the BSE Sector Classification System.

• Include all eligible share classes.

• Impact cost of 0.5% or less over the past 6-month period.

• Trading frequency >80% and listing history over six months.

• Turnover ratio of at least 5%.

Companies that have IPOs and have undergone a scheme of arrangement must have a listing history of at least one month. Exclusions are due to mergers, delisting, takeovers, suspensions, surveillance objections, bankruptcies, or GRM. Index stocks are excluded if the average daily total market capitalisation falls below INR 0.5 billion by the last trading day in January.