BSE launches BSE-TECk Index
Country's first free-float based index

Attuning itself to the global standards in equity index construction methodology and leading the way in responding to the market demand for a TMT Benchmark (Technology, Media and Telecommunications), The Stock Exchange, Mumbai (BSE) today launched the country's first free-float based Index - BSE TECk Index. The new index marks a paradigm shift in the Indian equity indexing scenario by introducing the concept of free-float adjustment - now a globally accepted index construction methodology.

A free-float based index construction methodology (also called modified market capitalisation method) takes into consideration only the non-promoter holding for the purpose of calculating the index. All the other existing equity indices in India currently take into consideration the entire market capitalisation for the purpose of calculation of Index. In case of BSE TECk Index, the market capitalisation of a company is adjusted to reflect the free-float portion only. For e.g. if a company has 35% non-promoter-holding, then only 35% of the total market capitalisation of the company would be considered for the purpose of calculating the BSE-TECk index.

The innovative BSE TECk Index has been produced specifically as a benchmark that would reflect the dynamic and unique characteristics of the Technology, Media and Telecommunications industries in India. With 21 constituents covering around 90% of the market capitalisation of the entire listed TMT universe, the new index ensures a very liquid, tradable index. The base value for the new index has been set as 1000 points as on the base date of April 2, 2001.

The market capitalisation and trading pattern of the TMT sectors on the bourses, coupled with the relevance of a sector specific product, qualifies the BSE TECk Index as an appropriate benchmark for funds tracking these industries.

All other indices of BSE including SENSEX will continue to be calculated according to the existing methodology based on Full-Market Capitalisation.

"The BSE-TECk Index has been launched in line with the international best practices and involved a lot of research in devising the construction methodology for the adjustment of free-float. The outcome is a quality equity benchmark for the TMT sectors which would find great utility in the market place both with retail and institutional investors."

Dr. Manoj Vaish
Dy. Executive Director

July 11, 2001