Sensex / Sensex 30 – Definition, Calculation Process, Companies Weightage & more

Sensex being the benchmark index of the Bombay Stock Exchange (BSE), it is essential one knows the correlation there exists. BSE is an establishment dated back to 1875, and therefore is the oldest of stock exchanges in Asia.

BSE as well holds the position of the fastest stock exchange, which incorporated a speed of 6 microseconds. Holding such a position, it houses around 5500 companies.

This often makes it difficult to evaluate the performance of market, taking into consideration every single company thereby listed.

Hence, a simpler measure is taken into account, known as the index. Here, smaller units of stocks are chosen as the representative of the market, based on which the market performance is evaluated.

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What is Sensex?

Sensex is substituted with the use of words “BSE 30”. The reference is in connection with the 30 financially stable companies that are taken as the base.

Sensex Meaning can be described through sensitive and index, and is a result of the amalgamation of both the same.


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    How is Sensex Calculated?

    SensexIt took a while for BSE to shift from full market capitalization method to free float method.

    The free float method deploys the shares offerings which are made to the general public, in open, and not the ones restricted for the government and the founders.

    The Sensex Calculation however has certain factors, which are to be taken into account, just like NSE.

    • 30 companies are to be listed, purely on the measure of free float capitalization
    • Year and value for the base range are set upon the year 1978-79 and the value 100
    • Base market capitalization is however 2501.24 crore

    The formula now goes by the value of free float cap of all the 30 companies, divided by the base market capitalization, altogether multiplied by 100.

    The performance level each of the 30 companies portrays, has an impact on the Sensex value displayed to us. There is a direct reflection of the company’s performance on the Sense.


    What is Sensex 30?

    Sensex 30 lists the number of companies which would be included in the sample index taken by the exchange to determine the overall market capitalization.

    It simply means 30 companies sum up the list of Sensex, thereby laying weight n each of the company.


    How Sensex 30 companies are selected?

    Various qualitative and quantitative factors sum up the process of Sensex 30 Companies inclusion.

    Quantitative factors

    • Market capitalization of the company is taken into account, where the respective company must be included in the top 100 companies. Also, the weight of the security for free float must definitely cross the threshold of 0.05% of index.
    • Enlisting should assuredly be done every single day, from the past 1 year, although a couple of exceptions are made.
    • Company must be included in the list of top 150 companies, based upon the average number of trades per day, and also average value of shares.
    • One year of BSE listing is absolutely essential for the respective company.

    Qualitative factors

    • The only qualitative factor is that, the track record of the company must be acceptable as per the committee.

    List of Shares in Sensex 30 & their Weightage

    Here is the Sensex 30 Shares list alongside its respective weight.

    SICompanyWeightage
    1RELIANCE12.42%
    2HDFCBANK12.00%
    3HDFC9.30%
    4ICICIBANK8.07%
    5INFY*6.30%
    6ITC5.33%
    7KOTAKBANK5.32%
    8TCS4.92%
    9L&T3.75%
    10AXISBANK3.56%
    11HINDUNILVR3.44%
    12SBIN2.92%
    13BAJFINANCE2.32%
    14MARUTI2.17%
    15BHARTIARTL2.00%
    16INDUSINDBK2.00%
    17ASIANPAINT1.84%
    18HCLTECH1.45%
    19ONGC1.24%
    20M&M1.18%
    21SUNPHARMA1.12%
    22TECHM1.11%
    23BAJAJ-AUTO1.04%
    24NTPC1.01%
    25POWERGRID1.00%
    26TATASTEEL0.76%
    27HEROMOTOCO0.73%
    28TATAMOTORS0.71%
    29VEDL0.63%
    30YESBANK0.27%
    31TATAMOTORS0.08%

    Companies of Sensex 30 Stocks which have a greater market cap will simultaneously have higher weightage.


    How is weightage determined in Sensex 30 companies?

    The brief process of calculating the weight of Sensex 30 Companies starts with pin pointing the individual free float market capitalization. The next step is to add up market capitalization of all the 30 thereby listed companies.

    Now, you have to calculate the weight of each company, by dividing its individual market cap by total market cap, and further multiplying it be 100.


    Sensex or Sensex 30 – Conclusion

    Summing up the article, we have a managed to maintain a thorough and easy fashion of listing the importance, thereby playing equally emphasis on all the factors related to the Sensex.

    Sensex 30 is a term we often come across, and the beginners who aren’t familiar with the same, can enter a new domain seamlessly, with appropriate understanding of the same.


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