Index Calculation & Maintenance Formula for Calculation of Index All BSE indices (except BSE-PSU index) are calculated using following formula: Free-float market capitalization of index constituents/ Base Market capitalization * Base Index Value For calculation of BSE-PSU index, full market capitalization of index constituents is considered instead of free-float market capitalization. Dollex-30, Dollex-100 and Dollex-200 are dollar-linked versions of SENSEX, BSE-100 and BSE-200 index. For more details click 'Dollex series of BSE indices'. BSE IPO index & BSE TASIS Shariah 50 Index is calculated using following formula: Capped market capitalization of index constituents/ Base Market capitalization * Base Index Value where capped market capitalisation for scrips in BSE IPO Index and BSE TASIS Shariah 50 Index is arrived by multiplying free-float adjusted market capitalisation of individual scrip with its respective capping factor.  Such capping factor is assigned to the index constituent to ensure that no single scrip based on its free-float market capitalisation exceeds weightage of 20% in case BSE IPO Index and 8% in case of BSE TASIS Shariah 50 Index at the time of rebalancing.  In case, weightage of all the constituents in the index is below 20% & 8% respectively, each company would be assigned capping factor of 1. Index Closure Algorithm The closing index value on any trading day is computed taking the weighted average of all the trades of index constituents in the last 30 minutes of trading session. If an index constituent has not traded in the last 30 minutes, the last traded price is taken for computation of the index closure. If an index constituent has not traded at all in a day, then its last day's closing price is taken for computation of index closure. The use of index closure algorithm prevents any intentional manipulation of the closing index value. Maintenance of BSE Indices One of the important aspects of maintaining continuity with the past is to update the base year average. The base year value adjustment ensures that replacement of stocks in Index, additional issue of capital and other corporate announcements like 'rights issue' etc. do not destroy the historical value of the index. The beauty of maintenance lies in the fact that adjustments for corporate actions in the Index should not per se affect the index values. The Department of BSE Indices does the day-to-day maintenance of the index within the broad index policy framework set by the BSE Index Committee. Department of BSE Indices ensures that all BSE Indices maintain their benchmark properties by striking a delicate balance between frequent replacements in index and maintaining its historical continuity. The BSE Index Committee comprises capital market expert, fund managers, market participants, members of BSE Governing Board. On - Line Computation of the Index During trading hours, value of the indices is calculated and disseminated on real time basis. This is done automatically on the basis of prices at which trades in index constituents are executed. Adjustment for Bonus, Rights and Newly Issued Capital Index calculation needs to be adjusted for issue of bonus and rights issue. If no adjustments were made, a discontinuity would arise between the current value of the index and its previous value despite the non-occurrence of any economic activity of substance. At the BSE Index Cell, the base value is adjusted, which is used to alter market capitalization of the component stocks to arrive at the index value. The BSE Indices Department keeps a close watch on the events that might affect the index on a regular basis and carries out daily maintenance of all BSE Indices. Adjustments for Rights Issues When a company, included in the compilation of the index, issues right shares, the free-float market capitalization of that company is increased by the number of additional shares issued based on the theoretical (ex-right) price. An offsetting or proportionate adjustment is then made to the Base Market capitalization. Adjustments for Bonus Issue When a company, included in the compilation of the index, issues bonus shares, the market capitalization of that company does not undergo any change. Therefore, there is no change in the Base Market capitalization; only the 'number of shares' in the formula is updated. Other Issues Base Market capitalization Adjustment is required when new shares are issued by way of conversion of debentures, mergers, spin-offs etc. or when equity is reduced by way of buy-back of shares, corporate restructuring etc. Base Market capitalization Adjustment The formula for adjusting the Base Market capitalization is as follows:         New Market capitalization New Base Market capitalization = Old Base Market capitalization x ----------------------------         Old Market capitalization To illustrate, suppose a company issues additional shares, which increases the market capitalization of the shares of that company by say, Rs.100 crore. The existing Base Market capitalization (Old Base Market capitalization), say, is Rs.2450 crore and the aggregate market capitalization of all the shares included in the index before this issue is made is, say Rs.4781 crore. The "New Base Market capitalization" will then be: 2450 x (4781+100)     ---------------------- = Rs.2501.24 crores          4781     This figure of Rs. 2501.24 crore will be used as the Base Market capitalization for calculating the index number from then onwards till the next base change becomes necessary.