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What Is Sensex and How is It Calculated? List of Top 30 Sensex Companies and Basics Of Sensex Explained

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If you have heard about the share market, then you must have heard about your Sensex too. Many people know about it but what about the others? You must have read or seen the word Sensex on a TV or in newspapers. Sometimes you see that Sensex has gone up by so many points today, sometimes you see that Sensex has dropped by so many points today, every day there is news about it because it is an important part of the share market and without their knowledge, trading in the share market cannot be done.

What Is Sensex Complete Information
What Is Sensex Complete Information

But still some people do not know about it, so if you want to trade in the stock market and want to know about Sensex, we will tell you today what is Sensex in the share market and what is the importance of Sensex in the share market. Because if you want to invest in the share market and you do not have any information about the market, then it can be very difficult and while taking information in the share market, the first thing that comes to our mind is the Sensex.

What Is Sensex

Sensex is a large index or indicator of the Bombay Stock Exchange called S&P BSE SENSEX and Sensex has been published in the stock market since 1986. The term Sensex was introduced by Deepak Mohoni. This word is made up of sensitive and index words. It is a sensory index. And in Sensex, those 30 lists of companies are made from the shares of 30 big active companies. These are the shares of the company from different sectors and all these 30 companies are registered in BSE Stocks Exchange.

And tell you that the same 30 companies cannot remain in Sensex forever. In Bombay Stock Exchange (BSE), the list of 30 companies varies from time to time depending on the performance of the company.

How Sensex decreases or increases

SENSEX monitors the fluctuations in the stocks of 30 companies listed within themselves. If the value of shares in the market of companies listed in SENSEX is increasing then SENSEX also increases and goes up. Whereas if the prices of shares in the market of companies listed in SENSEX are falling, then the Sensex also starts falling. The biggest reason for the share prices to go down and go up is the performance of the company that issues the shares.

How to calculate Sensex

Sensex was first calculated in 1986 using 30 company weighted from market “capitalization weighted method” and since 1 September 2003, Sensex has been calculated from “free-float methodology”.

You must have seen very big news channels and you have heard that Sensex is up or down by so many points and today the rate of Sensex is 25000 or 26000. So you must be thinking that how will these be calculated, then I must tell you in a very easy way, that the 30 companies registered in the Sensex are valued at 25000 or 26000 crores on that day, i.e. the total share price of those companies.

And the value of Sensex is derived from both methods but since 2003, Sensex has started calculating from Free-Float Methodology. Now we tell you how Sensex is calculated by ” capitalization weighted method”.

How Sensex is calculated from the Market Capitalization Method

We also call it market cap or market capital. To calculate it, the stock is multiplied from the market price. Assume that if a company has gone out to sell 1 lakh shares on the value of 30 (30 rupees in the market) then the market capital of the company will be 1,00,000 * 30 = 30,00,000.

How Sensex is calculated from the Market Capitalization Method
How Sensex is calculated from the Market Capitalization Method

Similarly, if the market rate of these shares of the company is currently Rs 100, then the total market cap (market capital) of the company will be Rs 100 lakh. So let me tell you with an example.

MARKET CAP = MARKET PRICE * TOTAL NO. OF SHARES ISSUED BY COMPANY

                        =   100 * 100000

                       =   100,00,000 Rs.

And believe that Sensex will have 100% of the company’s calculus, but we told you that the free float method with the market share is also used in Sensex. Those who are involved in public trading, now assume that 40% of the total shares of the company belong to the promoters and 60% is for the public, then the free float of the company will be 0.6. This means that when there is a calculus in SENSEX, it will be 60% of its calculation.

On what basis are 30 companies selected within Sensex?

The index committee under Sensex sees a lot of things while listing the company within the Sensex.

  • The shares of the company that are listed as SENSEX have been listed on the Stock Exchange for at least 1 year or more.
  • This company must be among the largest 150 companies in the country according to the number and value of average trades per day.
  • Stock trading of that company is mandatory on all the days of the stock market within the last one year.

Sensex top 30 company of Sensex

Sensex top 30 company of Sensex
Sensex top 30 company of Sensex

30 companies were included in the Sensex for the first time in 1986, the demand for shares of these companies is always there in the stock market. Such companies are called “blue chip” companies because it is the best performing company.

1) Adani Ports and Special Economic Zone Ltd.

2) Asian Paints

3) Axis Bank Ltd.

4) Bajaj Auto Ltd.

5) Bharti Airtel Ltd.

6) Cipla

7) Coal India Ltd.

8) Dr. Reddys Laboratories Ltd.

9) HDFC Bank Ltd

10) Hero MotoCorp Ltd.

11) Hindustan Unilever Ltd.

12) Housing Development Finance Corporation Ltd.

13) ICICI Bank Ltd.

14) ITC

15) Infosys Ltd.

16) Kotak Mahindra Bank Ltd.

17) Larsen & Toubro Ltd.

18) Lupin Limited

19) Mahindra & Mahindra Ltd.

20) Maruti Suzuki India Ltd.

21) NTPC Ltd.

22) Oil & Natural Gas Corporation Ltd.

23) Power Grid Corporation Of India Ltd.

24) Reliance Industries Ltd.

25) State Bank Of India

26) Sun Pharmaceutical Industries Ltd.

27) Tata Consultancy Services Ltd.

28) Tata Motors

29) Tata Motors – DVR Ordinary

30) Tata Steel Ltd.

31) Wipro Ltd.

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