Days Range
Company | LTP | Change | Day Range |
|---|
Sector Name | Advances | No Change | Declined |
|---|
S&P BSE basic materials index is one of the indexes that was launched by BSE to track the companies that deal in basic materials. Bombay Stock Exchange was established in 1875 and is the largest and the oldest Asian stock exchange comprising 6000+ listed companies. It has introduced various types of indexes based on market cap, performance, and sectors. BSE basic material is a sectoral index.
S&P BSE basic materials index reflects the movement and growth in the stock prices of the companies that are classified as basic material companies by the BSE’s classification system. All the stocks included in BSE basic materials are a part of the S&P BSE AllCap index. The constituents of BSE AllCap that belong to the basic materials category are included in the index. It provides an overview of the basic material segment to the investors.
The method used for calculating the value of this index is very similar to the other indexes such as BSE 100, BSE Mid-cap, etc. The index values are calculated in real-time and are affected by the BSE basic materials share price. Float-adjusted market capitalization method is used for calculating the value of the index. In simple terms, the shares that are available for trading on the exchange are considered for calculating the market cap, and privately held shares are excluded.
The index consists of 194 stocks currently and has a market cap of INR 1,61,654.32 Cr. The number of constituents of the BSE basic materials index keeps changing from time to time. The index is reviewed on a quarterly basis in December, March, and June and rebalanced in September every year. BSE basic materials index was introduced recently, on February 25, 2022. This index is represented in two currencies, i.e., INR and USD.
Earlier, the method of calculating the index values was the full capitalization method. All the shares, whether privately held or exchange-traded, were considered while calculating the market cap. Later it was realised that the privately held shares do not have any impact on the market price of the stock, and including it in the calculation was disrupting the true picture of the index performance. Float-adjusted capitalization method was introduced in 2003 to solve this problem.
Step-1 Multiply the BSE basic materials share price with the number of shares to find total market capitalization.
Step-2 Next, determine the percentage of freely floated shares in the market. Calculate the percentage of shares available for trading from the total number of shares.
Step-3 Use the figures calculated in the above steps to find float-adjusted market cap. Multiply the total market cap with the free float factor.
Here’s an example -
Company Y has 2 lakh shares in the market, out of which 70% are available for trading in the market. The market price of the stock is INR 500. Here’s how it is calculated -
| Total Shares in Market for Company Y | A | 2 lakhs |
| Market Price per share of Company Y | B | INR 500 |
| Total Market capitalization | C = A*B | INR 10 Crores |
| Free-float factor (70%) | D | 0.7 |
| Free-Float Market capitalization | E = C*D | INR 7 Crores |
The float-adjusted market capitalization is added up for all the constituent stocks and divided by the market cap of the base year. Let us comprehend it with the assistance of a formula -
Here’s the formula -
| BSE Basic Materials Index = Total Free-Float Market capitalization x 100
Base Market capitalization |
Basic material companies are those companies that discover, extract and process the raw materials for use in making various products. Companies that use raw materials are not considered basic material companies, but companies that are involved in the production, processing, and discovery of raw materials are known as basic material companies.
