The Hindu Business Line : Sterlite, Tata Power to figure in Sensex from July 28

Mumbai, June 14 The weightage assigned to the Sensex scrips will undergo changes with the inclusion of Sterlite Industries and Tata Power in place of Cipla and Ambuja Cements with effect from July 28.

The Index Committee of the Bombay Stock Exchange (BSE) in its meeting on Friday decided to revise the composition of BSE indices (Sensex, BSE 100, BSE 200 and BSE 500).

Sensex is a widely tracked index of 30 leading scrips and is meant to represent the blue chip companies of the major sectors of Indian industry.

weightage

The weightage enjoyed by Sterlite and Tata Power from July 28 will impact the weightage of the other Sensex scrips but not so much that of the index heavy weights Reliance Industries(15.86 per cent weightage), Infosys (8.71 per cent), ICICI Bank (8.18 per cent) and Larsen & Toubro (6.85 per cent), said analysts.

The Sensex has often danced to the tune of these ‘heavy weights’; sometimes so much so that its crossing the 14,000 mark on its opening on December 5, 2006 was only because of a single buy order for Reliance placed at a price higher than what was prevailing.

The Sensex then slipped below 14,000-mark to be conquered only a month later.

Compared to Sensex, NSE’s S&P CNX Nifty is a well-diversified 50-stock index spanning 21 sectors of the economy.

On the much more broadbased Nifty index , as on Friday, Reliance enjoyed a weightage of 11.91 per cent, ONGC of 6.31 per cent, Bharti of 5.67 per cent, NTPC of 4.84 per cent and Reliance Communication of 4.06 per cent.

The weightage given to the Sensex scrips is proportional to their free-float market capitalisation.

This means they either have more shares that can be freely traded in the market, or are quoting a higher price, or enjoying both situations.

Going by Friday’s close, Sterlite’s free-float market cap works out to Rs 21,830.64 crore, while that of Tata Power is Rs 19,349.24 crore, both much higher to those of Cipla & Ambuja which they are replacing.

The free-float market cap for Cipla and Ambuja Cements as on Friday stood at Rs 10,675.71 and Rs 7,117.62 crore respectively.

Their weightages were 1.03 per cent and 0.68 per cent. (Ambuja Cements and Cipla had full market caps of Rs 16,424.16 and 12,940.19 crore respectively.)

The full market cap of Sterlite on Friday stood at Rs 54,576.60 crore, while it was Rs 27,641.59 crore for Tata Power.

Sterlite will be the second among metal scrips after Tata Steel whose free-float market cap stood at Rs 43,065 crore. (Hindalco had a free-float market cap of Rs 15,067.38 crore.)

Tata Steel’s weightage on Sensex on Friday was 4.14 per cent at a free-float market cap of Rs 43,065 crore and Hindalco’s 1.45 per cent at Rs 15,067.38 crore.

Reinduction

Tata Power is being re-inducted into the Sensex, it had traded as a Sensex stock even as late as June 11, 2006 when it was excluded making way for Reliance Communications.

The only other power company stock listed on the Sensex is NTPC while the erstwhile Reliance Energy-now renamed Reliance Infrastructure-has hived off and listed its power business in a separate company Reliance Power.

Reliance Communication, Mahindra & Mahindra and DLF are the other recent entries among the Sensex scrips.

BSE’s revision in the composition of BSE 100, BSE 200 and BSE 500 indices will come into effect from June 23.

The recently demerged and listed Bajaj Financial Services has been included in the BSE 100 index.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Mirae plans overseas equity fund

FMCG, tech stocks turn ‘safer’ bet for investors

Sterlite, Tata Power to figure in Sensex from July 28

IPO mop-up lacklustre in May at Rs 300 cr

Investment marathon