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Bombay Stock Exchange National Stock Exchange

Founded - 1875

INDEX - SENSEX(Sensitive Index)

Key people - Madhu Kanan (CEO & MD)

No. of listings 5085

Market Capitalization - US$1.63trillion (Dec 2010)

Founded - 1992

INDEX - NIFTY(NSE Fifty)

Key people - Ravi Narain (MD)

No. of listings 1552

Market Capitalization - US$1.59 trillion (Dec2010)

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Calculation of SENSEX and NIFTY

Sensex has been calculated since 1986, initially it was calculated based on Total

Market Capitalization method and later in 2003 it was changed to Free Float Market

Capitalization

SENSEX

Sensex is calculated using share prices of 30 major companies which are listed in

BSE relative to the base value 100(1978-79) and is calculated for every 15seconds

Free Float Market Capitalization

It is defined as the value of all shares available for public trading in the open

market. These shares are called free float shares and are available for trading byanyone

Free Float shares exclude promoter equity, holdings through FDI route, holdings

by private corporate and holdings by government

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Formula for S ensex

SENSEX = (sum of free float market cap of 30 major companies of BSE) *

Index value in 1978-79 / Market cap value in 19 Market price 78-79

Base value of SENSEX is 100 as on 1978-79

Example : Suppose SENSEX consist of only two stocks such as X and Y

Company X has 1000 outstanding shares out of which only 500 are available

for trading in open market. Market price of share is Rs.100.

Company Y has 2000 outstanding shares out of which 1000 shares are held bypromoters and remaining 1000 are free float shares (open market shares).

Market price of share is Rs.50.

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Calculation of Free Float Market Capitalization

S tock Open MarketS tocks

Market price Market Cap

X 500 100 50000

Y 1000 50 50000

Sum of free float market cap of company X and company Y is 50000+50000 = 100000

A ssume market cap during 1978-79 is 25000

Now A pply formula 100000*100/25000 = 400

Calculation of Market Capitalization

S tock Issued S tocks Market price Market Cap

X 1000 100 100000

Y 2000 50 100000

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