BSE Sensex 30 companies! Weightage of Sensex 30 companies

BSE Sensex 30 companies! Weightage of Sensex 30 companies

BSE Sensex is a basket of 30 companies representing a sample of large, liquid, and fundamentally sound companies.

These Sensex 30 companies are also known as Bluechip Companies of India.

BSE Sensex 30 companies list

Sr.NoNameIndustryMcap Full (Cr.)Mcap Free Float (Cr.)
1Reliance Ind.Integrated Oil & Gas9,15,283.064,85,100.02
2Hdfc BankBanks4,58,677.053,39,421.02
3HdfcHousing Finance2,61,902.922,61,902.92
4Icici BankBanks1,94,397.841,94,397.84
5InfosysIT Consulting & Software2,81,050.922,44,514.30
6TCSIT Consulting & Software7,27,906.351,89,255.65
7ITCCigarettes, Tobacco Products2,02,883.281,52,162.46
8Hindustan UnileverPersonal Products4,71,315.031,55,533.96
9Kotak Mahindra BankBanks2,13,007.251,49,105.08
10L&TConstruction & Engineering1,14,557.5999,665.10
11Axis BankBanks1,01,914.5879,493.37
12Bharti AirtelTelecom Services2,94,327.321,08,901.11
13Asian PaintsFurniture,Furnishing,Paints1,43,994.7767,677.54
14SBIBanks1,38,688.4659,636.04
15Maruti Cars & Utility Vehicles1,42,682.9962,780.51
16Nestle IndiaPackaged Foods1,56,581.0557,934.99
17Bajaj FinanceFinance1,16,727.6847,858.35
18Sun PharmaPharma1,05,724.0848,633.08
19HCL TechIT Consulting & Software1,38,681.8555,472.74
20TitanOther Apparels & Accessories72,478.8634,065.07
21Ultratech CementCement & Cement Products95,484.4036,284.07
22Power GridElectric Utilities80,828.0634,756.07
23NTPCElectric Utilities87,962.6133,425.79
24M&MCars & Utility Vehicles46,619.7236,363.38
25Bajaj Auto2/3 Wheelers71,761.5733,727.94
26Tech MahindraIT Consulting & Software48,631.2931,124.02
27ONGCExploration & Production91,710.2429,347.28
28Indusind BankBank26,244.3121,782.77
29Hero Moto Corp2/3 Wheelers41,344.0526,873.63
30Tata SteelIron & Steel/Interm .Products30,532.4921,067.42
List Of Sensex 30 Companies

How are BSE Sensex 30 companies are selected?

The BSE has come up with a general guideline for any new company to enter the Sensex.

  1. Quantitative Criteria
  2. Qualitative Criteria

#1. Quantitative Criteria

  • Market Capitalization: The Security should figure in the Top 100 companies listed by full market capitalization. The weight of each Sensex Security based on free-float should be at least 0.5% of the Index. (Market Capitalization would be averaged for last six months)
  • Trading Frequency: The Security should have been traded on every trading day for the last one year.
  • Average Daily Trades: The Security should be among the Top 150 companies listed by the average number of trades per day for the last one year.
  • Average Daily Turnover: The Security should be among the Top 150 companies listed by an average value of shares traded per day for the last one year.
  • Listed History: The Security should have a listing history of at least one year on BSE.

#2. Qualitative Criteria

  • Track Record: In the opinion of the Committee, the company should have an acceptable track record.

Only if a new company successfully passes these 2 criteria set by BSE, that company gets an entry in BSE Sensex 30 companies.


Are these 30 companies permanent in the Sensex list?

No.

These companies are not permanent in the Sensex 30 companies list and they change over time.

Sensex list for the year 1988 and 2018

(Source: The list of 30 companies that make up the Sensex have changed since 1986)

Here you can see that only a few companies have managed to maintain their position in the index.

But who decides to enter a new company and leave the old one?

  • BSE Index committee

On what basis does the BSE Index Committee change company?

An index committee meets every quarter to review all BSE indices, including the Sensex. But, not every review meeting needs to change the index company.

At each review meeting, the index committee reviews the performance of the Sensex 30 companies. And if a company is not performing well, then the committee removes it and admits a new company that is consistently performing well.

  • Such as Hindustan Unilever, which has been a part of the Sensex since its inception due to its consistently good performance.

In December 2019, BSE removed YES Bank, Vedanta, Tata Motors, and added Titan Company, Ultra Tech Cements, and Nestle India to the benchmark Sensex.

Why did the committee remove Yes Bank, Vedanta, and Tata Motors from the Sensex 30 companies?

  • The BSE removed all three stocks due to persistent stock price underperformance and uncertainty about the prospects for their future business growth.

Let’s check the performance of these three stocks in comparison to the performance of the Sensex in a year.

company1 Year Return(%)
Sensex-20%
Yes Bank-89%
Vedanta-55%
Tata Motors-69%

Here you can see that these three stocks underperform the Sensex by a huge margin. And this is the main reason why these stocks have been removed from the Sensex list

Why did the committee enter Titan, Nestle, and Ultratech Cement to the Sensex 30 companies?

Now, the main purpose of the Sensex is to give maximum return to their shareholders. And you all know that if all the stocks in the Sensex perform well, then the Sensex can give better returns.

Therefore, BSE gives entry to those shares which have performed well in the past and are likely to perform well in the future.

Of the three, let us check the past performance of one stock

Titan company

No.of Yearscompound sales growthcompound profit growthcompound share price growthReturn on Equity
10 year17.61%23.39%25.90%28.17%
5 year12.60%13.81%19.14%23.93%
3 year20.60%27.56%26.51%23.66%
1 year11.75%9.86%-19%25.22%
Titan Company last 10 years performance

From the above data, you can see that the Titan company has performed very well in the last 10 years in all dimensions.

Because of this, it has been included in the BSE Sensex 30 Index.

Let’s check the price performance of these three stocks in a year.

Company1 Year Return(%)
Sensex-20%
Titan Company Ltd-19%
Nestle India Ltd60%
Ultratech Cement-20%

Here is the price performance of the all 6 stocks in a year

1 year return of BSE sensex 30 companies

Also Read : All you need to know about Sensex reshuffle and how it affects investors


BSE Sensex 30 Companies Weightage(Update : 18-05-2020)

BSE senserx 30 companies weightage

Reliance Industries has the highest weightage among sensex 30 companies.

What does the weightage show?

Reliance has the highest weightage of 15.17%.

For our simplicity, assume that Reliance’s weightage is 10% on the index and the index is 30,000.

  • This means that out of 30,000 Sensex points, Reliance contributes 3,000 points (30,000 * 0.10)

Now if the next day, Reliance’s stock rises 1%, it will contribute 1% of 3000 to the index, i.e. 30 points.


How to Calculate Weightage of companies

Step-1 : List all BSE Sensex 30 companies..

Step-2: Calculate the Free-float market cap of all stocks from www.bseindia.com.

Step-3 : Add up the Free-float market cap of all the stocks and make a total.

Step-4: Finally divide the individual free-float market cap by the total free-float market cap.

Here is the Example

Calculation of BSE sensex 30 companies weightage

Does the company’s weightage remain the same in the BSE Sensex 30 companies?

  • No.

As we know,

Weightage of company=Free-float Market cap of that company / Total Free-float market cap of Sensex 30 companies.

Now,

Free-float market cap=(Share price) x (Total number of shares available for trading purpose only)

  • In general, the total number of shares available for trading purposes remains almost the same throughout the year
  • But, share prices are constantly changing.

Therefore, depending on the changes in the company’s price, the weightage varies.


Top 10 Weightage companies

Top 10 Weightage companies in sensex

Understanding of Weightage of Different companies in Detail

Understanding of Weightage of Different companies in Detail

For that, Compare the price movements and index contributions of Reliance Industries and Kotak Mahindra Bank.

  • Reliance’s share price has risen 4.57% and Kotak Bank’s share price has risen 4.72% respectively.
  • But look at the last column, Reliance’s contribution to the index is 169.65 points and Kotak Bank’s contribution is only 62.95 points.

Why is there so much difference?

  • This is due to the different weightage of different companies in the index.

Here, Reliance’s weightage on the index is about 2.59 times higher than that of Kotak Mahindra Bank.

BSE SENSEX Sectorwise weightage

BSE SENSEX Sectorwise weightage
Source : www.bseindia.com

Frequently Asked Question

What is Sensex? How it is calculated?

https://www.nivesak.com/beginner/sensex-complete-guide/

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