BSE Group A Stocks

•6 min read•by Angel One

BSE Group A stocks are liquid and actively traded equities on the BSE, selected based on strict criteria for trading frequency, governance, liquidity and settlement efficiency.

Share

BSE Group A stocks are the most liquid and actively traded stocks on the Bombay Stock Exchange. These shares undergo a normal rolling settlement system and are subject to strict compliance, governance and liquidity norms dictated by the exchange. Companies are selected based on trading frequency, market capitalisation, turnover, and compliance metrics, making it a suitable company group for investors who wish to seek stability, transparency and efficient price discovery in equity markets.

Key Takeaways

Must trade a minimum of 98% of the trading days in the previous quarter.

Free-float market capitalisation carries 50% weightage, and turnover carries 25% weightage.

Minimum listing is three months unless it is F&O or restructuring cases.

Group A usually includes the top-ranked 200 BSE companies based on scoring, and the number may vary each review cycle.

What Are Group A Stocks?

Group A stocks are some of the most actively traded with highly liquid shares on the exchange. Consistently high levels of trading activity and high standards of regulation and compliance are observed in these stocks, and are set by the exchange. Trades occurring in this category are settled through the normal rolling settlement mechanism, and as such, are conducive to the normal rolling of trading activity.

In order to qualify as BSE Group A stocks, companies must have traded on at least 98% of trading days in the past quarter. Typically, this group consists of large and well-established companies with strong market capitalisation, governance and liquidity.

Group A Selection Criteria

The company must have been listed on the exchange for a minimum of 3 months. Exceptions to this rule are:

If a company is permitted to trade in the F&O segment from the date of its listing

If a company is listed subsequent to any corporate action that involves a merger, demerger, capital restructuring, etc.

The company must have traded for at least 98% of the trading days in the last quarter

The company has passed the screening for investigation & compliance by the Department of Surveillance & Supervision (DOSS), but the companies with a negative investigation will be considered ineligible

The scoring mechanism to select companies of Group A

Category	Weightage (in %)
Last quarter average free-float market capitalization of the company	50
Last quarter average turnover of the company	25
Corporate governance (Source of information - latest annual report submitted by the company)	10
Compliance monitoring	10
Responsible/Sustainable investment (Source of information - latest annual report submitted by the company)	5

Also Read: What are Futures & Options(F&O)

Hierarchy of Selection of Companies in Group A

Companies that have been ranked among the top 200 (based on the Group A scoring methodology) for the last 3 consecutive quarters are first included in Group A.

Companies that were in the top 200 for at least the previous two quarters are taken into consideration and added if this list still contains fewer companies than the intended Group A universe.

Companies that are currently rated in the top 200 in the most recent quarter are additionally included if the total falls short of the goal count after applying the aforementioned two filters.

Even if they momentarily drop out of the top 200 by rank, S&P BSE 500 companies that are currently categorised in Group A will typically stay in this group until they violate liquidity/compliance requirements during surveillance inspections.

*Please note that the number of companies in group A may vary from the number mentioned above.

Other Groups in BSE

Apart from Group A, there are groups in BSE, including T, Z, S and B categories, identified based on liquidity compliance and trading rules. Group T stocks are settled on a trade-to-trade basis with intraday trading not permitted. Group Z is for companies that are failing to comply or investor grievance norms. Group S includes small and mid-sized firms, which are less liquid and have greater volatility. Stocks that do not meet these requirements are considered under Group B, which experience regular rolling settlement with average trading volumes.

Conclusion

BSE Group A stocks correspond with some of the most actively traded and liquid stocks available on the exchange, and are therefore suitable for investors who want stability and efficiency in execution. Their inclusion is based on strict criteria such as liquidity, market capitalisation and compliance standards. Understanding how Group A varies from other Groups of BSEs helps investors to understand the risk, flexibility of trade and settlement mechanisms before making informed decisions on investments.

FAQs

What are grade A stocks?

Grade A stocks are extremely liquid stocks with decent fundamentals and high trading volumes, as well as perfect compliance records. On exchanges such as BSE, such stocks typically comprise Group A and follow normal rolling settlement with a reduced liquidity risk.

What is group B in BSE stocks?

Group B in BSE consists of the MNCs that are not qualified for group A but are qualified in the basic listing and compliance norms. These stocks are rolling settlement stocks and have generally moderate liquidity and average trading volumes.

What are group 1 stocks?

Group 1 stocks usually refer to the top as well as actively traded stocks situated on some stock exchange, similar to Group A stocks situated on the BSE. They are generally representatives of large, established companies with a high market capitalisation, liquidity and strong regulatory compliance.

What are category A shares?

Category A shares are shares in companies with high liquidity, large free float market capitalisation and where there are high governance standards. On BSE, Category A shares are actively traded and widely followed by investors and are also available for normal rolling settlement.

Are A or B shares better?

A shares tend to be more suitable for most investors because of their higher levels of liquidity, lower volatility of price and tighter norms of compliance. B Shares there may be opportunities, but generally are more liquidity risk and lower steady trading volumes.