S&P BSE Telecommunication

The Indian Telecom industry is the 3rd largest in terms of FDI inflows. It contributes more than 7% of the total FDI inflow and creates approximately 2.2 million direct employment. The telecom industry consists of 3 main sub-industries, i.e. telecom equipment, telecom services, and wireless communication. 

Tracking the performance of each industry separately can help determine the overall market trend and also help investors track the sector-specific performance. BSE has classified all the stocks listed on the stock exchange on the basis of their sectors to track their sectoral performances. S&P BSE Telecom is a part of these sectoral indices that consist of various other sectoral indices. 

The main purpose of the BSE Telecom index is to track the performance and the movement of telecom companies. The index consists of those companies that belong to the telecom sector only. The constituents are selected from the BSE AllCap index. 

The index was launched for the first time on February 25, 2022. The value of the index is calculated in real-time. Currently, the index consists of 17 stocks and holds a market cap of INR 327,353.59 mn. S&P BSE Telecom index has two versions based on currencies. One is reflected in INR and the other in USD. September 18, 2020, is considered the base date for calculating the index value. 

Before 2003, the full market capitalization method was used to calculate the index value. Later it was changed to a free-float market capitalization method. Unlike the full capitalization method, the free-float market capitalization method considers only the shares available for free trading while calculating the market cap of the constituent stocks. 

The ranking of the stocks is based on their market capitalization. But, while calculating this rank, the weights are given and capped. The calculation of the BSE telecom share price involves the redistribution of excess weight until everything is balanced.