BSE Largecap

What is BSE LargeCap?

The S&P BSE LargeCap index, also known as BSE LargeCap, is a stock market index that consists of the top 98 companies in the large-cap segment that are listed on the Bombay Stock Exchange. The constituents of the index represent the top 70% of the total market capitalisation of the S&P BSE AllCap index.

The primary objective of the BSE LargeCap index is to measure the performance of the large-cap segment of the Indian stock market, which comprises established and financially stable companies with a significant market presence. These companies are leaders in their respective industries and typically have a strong track record of performance and stability.

Investors often use the BSE LargeCap index as a benchmark to evaluate the performance of their large-cap investments or as a reference point for assessing the overall health of the Indian stock market. The index provides insight into the performance trends of prominent companies across various sectors, offering valuable information for investment decision-making.

The top five sectors that make up the S&P BSE LargeCap index include finance, oil & gas, information technology, FMCG and transport equipment. The top 10 constituents by index weight, meanwhile, are as follows:

Note: The data is as of March 28, 2024.

What is the process for calculating the BSE LargeCap Index?

The calculation of the S&P BSE LargeCap index follows a transparent and objective methodology to ensure accuracy and reliability. The index is calculated by the free-float market capitalisation method, meaning that the weight of each constituent stock is determined by its market capitalisation and is adjusted for the proportion of shares available for public trading.

The process for calculating the BSE LargeCap index involves several steps. Here is a brief outline of how the index is calculated.

1. Selection of Constituent Stocks

The index committee ranks the constituents of the S&P BSE AllCap index based on their cumulative average daily total market capitalisation. The top 70% of them are assigned to the S&P BSE LargeCap index.

2. Calculation of Free-float Market capitalisation

The market capitalisation of each constituent stock of the BSE LargeCap index is calculated by multiplying its share price by the number of shares freely available for trading. The resulting figure is then multiplied by the free-float factor to get the free-float market capitalisation.

Here are the formulas used to calculate the free-float market capitalisation of a stock.

Market Capitalisation = Current Market Price * Number of Shares Freely Available for Trading

Free-Float Market Capitalisation = Market Capitalisation x Free-Float Factor

3. Index Calculation

The index value is calculated by adding the free-float market capitalisations of all the constituent stocks and multiplying it with the base index value. The resulting figure is then divided by the base market capitalisation of the BSE LargeCap index.

Here is the formula that’s used to calculate the index value of the S&P BSE LargeCap.

S&P BSE LargeCap Index Value = [(Free-Float Market Capitalisation of All Constituents * Base Index Value) ÷ Base Market Capitalisation]

The index is regularly reviewed in the months of March, June and December and is rebalanced each year in the month of September. This is done to ensure that the BSE LargeCap index accurately reflects the performance of the large-cap segment of the Indian stock market.

How to invest in S&P BSE LargeCap Index?

Investing in the S&P BSE LargeCap directly is not possible since it is a market index, which is essentially a collection of multiple large-cap stocks across different sectors and industries. However, there may be a few indirect ways to gain exposure to such market indices.

Through Index Funds

Index funds are a type of mutual fund that invests in the same constituents at the same weightage and proportion as market indices. This allows the funds to track and directly replicate the performance of the index. Index funds are passively managed and feature low expense ratios. Investing in a mutual fund based on the BSE LargeCap index could give you exposure to the index.

Through Mutual Funds

Some large-cap mutual funds may feature some of the constituents of the BSE LargeCap index. Investing in such funds could provide partial exposure to the index. However, it is essential to note that the stock weightage and proportion may not be an exact match.

Through Direct Investments

Alternatively, you could also choose to invest directly in individual stocks that are constituents of the S&P BSE LargeCap index. However, this approach requires thorough research and analysis of individual companies to build a well-diversified portfolio. Additionally, you would need to invest in the constituents in the same proportion and weightage as the index to replicate its performance.

S&P BSE LargeCap FAQ's