S&P BSE SME IPO

What is the BSE SME IPO Index?

BSE SME IPO is a strategy index on the Bombay Stock Exchange (BSE). It captures the performance of a select group of small and medium enterprises (SMEs) after they have been listed on the BSE SME platform, i.e., post completion of their initial public offering. It is the only index in India which tracks the newly listed SMEs performance for over a year.

The S&P BSE SME IPO index is a diversified index of 43 stocks that span 12 sectors, including Healthcare, Housing Related, Capital Goods, Consumer Durables, FMCG, Chemical & Petrochemical, Tourism, IT, Finance, Oil & Gas, Media & Publishing, and Metal, Metal Products & Mining.

This S&P BSE SME IPO index was launched on December 14, 2012, with the first value date as August 16, 2012, and with base value at 100. Since its inception, the S&P BSE SME IPO share price has breached the levels of 12,000 at ~29.82x P/E multiples.

Index value is calculated based on the float-adjusted market capitalisation method on a real-time basis. It is rebalanced every month.

S&P BSE SME IPO index is managed and governed by S&P BSE Index Committee set up under Asia Index Private Ltd, which is a joint venture of S&P and BSE Ltd. The BSE SME IPO index is calculated in two currencies: INR and USD; for USD, spot foreign exchange rates are applied from Refinitiv’s data.

BSE SME IPO Stocks Selection Criteria

The BSE SME IPO share price is computed by weighting its 43 stocks based on float-adjusted market capitalisation, using the divisor methodology of the S&P Dow Jones equity indices.

In order to be included in this index, the BSE SME IPO index stocks must fulfil the following criteria:

1. Should be domiciled in India and newly listed on the BSE SME platform.
2. Should have a minimum post-issue capital of Rs. 1 crore, not exceeding Rs. 25 crores, to be eligible for inclusion on the BSE SME platform.
3. Should be included on the second day of its listing.
4. Should be excluded from the index after being listed for one year.
5. Should have a minimum number of 10 stocks at all times; in case there is a shortfall, the company stock’s exclusion is delayed till a new eligible stock can be found.
6. Should only include common stocks of the SME IPO companies.
7. Follow-on public issues are ineligible for inclusion in the index.
8. Should be excluded from the index on the effective day of the index stock’s migration from the BSE SME platform to the BSE Mainboard platform, even if the stock hasn't completed one year of listing on the BSE SME platform.

How is BSE SME IPO Value Calculated?

The index value is calculated as follows –

Index value = Index Market Value / Divisor

Where,

Index Market Value = Price * Shares * IWF (Float Factor)

Divisor after rebalancing = Market Value after rebalancing/ Index Value before rebalancing

The BSE SME IPO index is reconstituted every month, which becomes effective on the Monday that follows the third Friday of each month.