How is the Sensex calculated?

by Manshu on November 9, 2011

in Investments

The Sensex is one of the most widely followed index in India, and in this post we are going to look at how the Sensex is calculated.

The Sensex is constructed using the free float methodology, which simply refers to a company’s share capital that is freely available for trading.

You know that market capitalization is the number of shares that a company has multiplied by the price per share, so when they say that Coal India has become the most valuable company in the country – this is what they refer to.

Free float is that part of the company’s capital that’s not held by promoters, governments or other strategic investors and is available to trade on the stock exchange freely.

Now, the free float market capitalization method simply means that the company with a higher free float will have a higher weight in the index, and a great way to understand is to just take a look at the Sensex constituents for a particular date.

In this table I’ve taken the data as it stands on November 4th 2011.

Scrip Code Company Close Price No.of Shares (normal) Full Mkt. Cap.

(Rs. crore)

Free-Float Adj. Factor Free-Float Mkt. Cap

(Rs. crore)

*Weight in Index

(%)*

500325 RELIANCE 879.6 3274230107 288001.28 0.55 158400.7 10.97
500209 INFOSYS LTD 2829.1 574203082 162447.79 0.85 138080.62 9.56
500875 I T C LTD 210.35 7773036720 163505.83 0.7 114454.08 7.93
532174 ICICI BANK L 885.2 1152447612 102014.66 1 102014.66 7.06
500010 HOUSING DEVE 682.9 1469093501 100324.4 0.95 95308.18 6.6
500180 HDFC BANK LT 482.1 2335493765 112594.15 0.8 90075.32 6.24
500510 LARSEN & TOU 1392.85 611161097 85125.57 0.9 76613.02 5.31
532540 TCS LTD. 1099.1 1957220996 215118.16 0.3 64535.45 4.47
500112 STATE BANK O 1964.25 634998991 124729.68 0.45 56128.35 3.89
532454 BHARTI ARTL 397.95 3797530096 151122.71 0.35 52892.95 3.66
500312 ONG CORP LTD 277.65 8555490120 237543.18 0.2 47508.64 3.29
500520 MAHINDRA & M 835.05 613974839 51269.97 0.8 41015.98 2.84
500696 HIND UNI LT 378.85 2160326258 81843.96 0.5 40921.98 2.83
500570 TATA MOTORS 188 2691485485 50599.93 0.7 35419.95 2.45
500470 TATA STL 467.9 959214779 44881.66 0.7 31417.16 2.18
532555 NTPC LTD 179.55 8245464400 148047.31 0.2 29609.46 2.05
500103 BHEL 333.65 2447600000 81664.17 0.35 28582.46 1.98
532977 BAJAJ AUTO 1743.1 289367020 50439.57 0.5 25219.78 1.75
532286 JINDAL STEEL 577.3 934509595 53949.24 0.45 24277.16 1.68
507685 WIPRO LTD. 371.55 2457457840 91306.85 0.25 22826.71 1.58
524715 SUN PHARMACE 511.55 1035550385 52973.58 0.4 21189.43 1.47
500182 HEROMOTOCO 2116.2 199687500 42257.87 0.5 21128.93 1.46
533278 COAL INDIA 326.35 6316364400 206134.55 0.1 20613.46 1.43
500440 HINDALCO IN 139 1918551613 26667.87 0.7 18667.51 1.29
500900 STERLITE IN 123.15 3360700478 41387.03 0.45 18624.16 1.29
500400 TATA POWER 103.3 2373072360 24513.84 0.7 17159.69 1.19
532500 MARUTISUZUK 1123.35 288910060 32454.71 0.5 16227.36 1.12
500087 CIPLA LTD. 293.7 802921357 23581.8 0.65 15328.17 1.06
532868 DLF LIMITED 246.8 1698001797 41906.68 0.25 10476.67 0.73
532532 JAIPRAK ASSO 79.25 2126433182 16851.98 0.55 9268.59 0.64

Notice how there is not much difference between the market capitalization of  Reliance and Coal India relative to their weight in the Sensex. One has a weight of almost 12% while the other has a weight of just 1.43%.

The difference is due to the fact that while most of Coal India is owned by the government, most of Reliance is owned by the general public and has a much higher free float as a result.

You will also see that there is a column called Free Float Adj Factor there which indicates what fraction should the total market capitalization be multiplied with to come up with the free float market capital to be considered in the Sensex calculation.

So, they just don’t say this company has a free float of 42.5% so let me multiply its market cap with .425 but rather they have slabs and decide how much to multiply the total market capitalization based on which slab it falls under.

Here is the table that shows the slab:

% Free-Float

Free-Float Factor

% Free-Float

Free-Float Factor

>0 – 5%

0.05

>50 – 55%

0.55

>5 – 10%

0.1

>55 – 60%

0.6

>10 – 15%

0.15

>60 – 65%

0.65

>15 – 20%

0.2

>65 – 70%

0.7

>20 – 25%

0.25

>70 – 75%

0.75

>25 – 30%

0.3

>75 – 80%

0.8

>30 – 35%

0.35

>80 – 85%

0.85

>35 – 40%

0.4

>85 – 90%

0.9

>40 – 45%

0.45

>90 – 95%

0.95

>45 – 50%

0.5

>95 – 100%

1

The next thing to look at are the weights, and it’s obvious that the way the index has been constructed – the weights change every second because price is an input for how much a stock will influence the Sensex, and that changes every second.

I have been recording the percentages for a few days to write this post, and here is a result from the past few days.

Nov 1 2011

 Nov 2 2011

 Nov 4 2011

 Company

Weight

 Company

 Weight

 Company

 Weight

RELIANCE

10.78

RELIANCE

10.93

RELIANCE

10.97

INFOSYS LTD

9.63

INFOSYS LTD

9.61

INFOSYS LTD

9.56

I T C LTD

7.88

I T C LTD

7.93

I T C LTD

7.93

ICICI BANK L

7.18

ICICI BANK L

7.12

ICICI BANK L

7.06

HOUSING DEVE

6.64

HOUSING DEVE

6.62

HOUSING DEVE

6.6

HDFC BANK LT

6.27

HDFC BANK LT

6.29

HDFC BANK LT

6.24

LARSEN & TOU

5.32

LARSEN & TOU

5.31

LARSEN & TOU

5.31

TCS LTD.

4.52

TCS LTD.

4.52

TCS LTD.

4.47

STATE BANK O

3.78

STATE BANK O

3.8

STATE BANK O

3.89

BHARTI ARTL

3.65

BHARTI ARTL

3.56

BHARTI ARTL

3.66

ONG CORP LTD

3.31

ONG CORP LTD

3.32

ONG CORP LTD

3.29

HIND UNI LT

2.92

HIND UNI LT

2.94

MAHINDRA & M

2.84

MAHINDRA & M

2.85

MAHINDRA & M

2.87

HIND UNI LT

2.83

TATA MOTORS

2.54

TATA MOTORS

2.52

TATA MOTORS

2.45

TATA STL

2.2

TATA STL

2.19

TATA STL

2.18

NTPC LTD

2.04

NTPC LTD

2.02

NTPC LTD

2.05

BHEL

1.9

BHEL

1.89

BHEL

1.98

BAJAJ AUTO

1.73

BAJAJ AUTO

1.73

BAJAJ AUTO

1.75

JINDAL STEEL

1.63

JINDAL STEEL

1.64

JINDAL STEEL

1.68

WIPRO LTD.

1.6

WIPRO LTD.

1.6

WIPRO LTD.

1.58

HEROMOTOCO

1.49

SUN PHARMACE

1.46

SUN PHARMACE

1.47

SUN PHARMACE

1.46

HEROMOTOCO

1.45

HEROMOTOCO

1.46

COAL INDIA

1.45

COAL INDIA

1.44

COAL INDIA

1.43

STERLITE IN

1.3

STERLITE IN

1.3

HINDALCO IN

1.29

HINDALCO IN

1.27

HINDALCO IN

1.27

STERLITE IN

1.29

TATA POWER

1.17

TATA POWER

1.18

TATA POWER

1.19

MARUTISUZUK

1.14

MARUTISUZUK

1.13

MARUTISUZUK

1.12

CIPLA LTD.

1.05

CIPLA LTD.

1.05

CIPLA LTD.

1.06

DLF LIMITED

0.7

DLF LIMITED

0.7

DLF LIMITED

0.73

JAIPRAK ASSO

0.62

JAIPRAK ASSO

0.62

JAIPRAK ASSO

0.64

This is an important point, and is something that most people aren’t able to wrap their heads around in the first time. When you think about weight of a stock in the Sensex you think of it as a static value like Reliance has 12%, ICICI Bank has 7% and so on, but that is not true because the weight changes every second as the price changes. In this table I have highlighted two companies whose relative importance changed from one day to another in the Sensex.

So, the weight shows you much the stock is currently worth to the Sensex but that is not a static value, and will change every second.

With those things out of the way – now think of the utility of the Sensex – why do you need the Sensex at all?

Like any other index – it tells you how the stock market is performing at any given time – a higher Sensex means share prices are higher, and a lower Sensex means share prices are lower and that share price movement is captured in the form of free float market capital in the Sensex.

To maintain continuity and make the number comparable across time – the Sensex had to have a base – and that base was the market capital of the stock market in 1978 – 79 and the base index value of the Sensex was 100. The value that you see today is the sum of the free float market capital of the thirty companies relative to the base market capital.

The base is not a static value but keeps changing because they need to account for special events like rights issue, bonus issues, change of companies in the index so that these special events don’t affect the continuity of the index.

Based on the market data that I have seen for the past few days I have calculated the current base market capitalization as Rs. 8,221.94 crores.

Formula to calculate the Sensex

The formula to calculate the Sensex is as follows:

(Sum of Free Float Market Capital / Base Market Capital ) x 100

You can get the sum of free float market capital very easily from this page, however this changes every day so you need to save it with you if you need to refer to it later.

For this post – I have saved the data in my spreadsheet.

Let’s look at some of the past data:

Nov 1 2011 (1,437,262.79 / 8221.94) x 100 = 17,480.83

Nov 2 2011 (1,435,949.06 / 8221.94) x 100 = 17,464.84

Nov 7 2011 (1,443,986.58 / 8221.94) x 100 = 17,562.60

Nov 8 2011 ( 1,444,556/ 8221.94) x 100 = 17,569.53

Nov 9 2011 (1,427,501.45 / 8221.94) x 100 = 17,362.10

You can quite easily calculate the Sensex any day by just going to the BSE Website, and getting the total market free float and putting it in this simple formula. If it doesn’t come up correct, then that means the base market capital has been changed and you need to back calculate that and test it out on a few days to make sure that you have the right base market capital and then use it to calculate the Sensex in the ensuing days.

Once you understand all the inputs that go into the calculation it becomes fairly simple to calculate the final Sensex value, but probably more important than calculating the value is to understand the mechanics behind it and what it’s trying to show to you.

As always, questions and comments welcome – especially if there were some parts that you thought were not clear enough and need more explaining.

This post is from the Suggest a Topic page.

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{ 75 comments… read them below or add one }

ujjwal November 10, 2011 at 11:03 am

dear manshu
thanks a lot for this post….finally i have understood the method….what i will say…..kudos to your sincere effort….
some observation:– ICICI bank have all of his share as free float….it must be highly liquid….
and i want to add one point regarding weight in sensex….i went to the bse link provided in your article and see the market capitalizations…and make some calculation….and understand that weight simply means ( free float market capitalization of that share)/( total free float MC)….
as market price change ( or occasionaly free float adjustment factor) , the others values keep on changing….really interesting….
one more observation: Top 7 companies have weightage of more than 50 % …that means how important these companies are…..
thanks…it have given me some insight about share market….
i am waiting for your EPS and PE post…

Reply

Manshu November 10, 2011 at 8:14 pm

Fantastic!!!

I loved your comment!

Too often people suggest a post but don’t follow up with comments which makes me a bit mad because a lot of effort goes into writing this. I loved seeing your response and finding out how engaged you were and also went to the BSE site to look at more info – that’s just great.

EPS and PE post will come up in a week or two – still not sure what data is present and isn’t.

Thanks!

Reply

arif March 11, 2013 at 7:07 pm

full details and calculations of sensex with live examples please

Reply

bemoneyaware November 10, 2011 at 12:28 pm

Hello

Very basic and very informative. There are some things we just take for granted (when it is beyond us) such as how Sensex is calculated. Thanks for sharing
Is NSE also calculated the same way?

Reply

Manshu November 10, 2011 at 8:06 pm

Yeah, Nifty is also a free float market cap based index and is calculated similarly, but instead of a base market cap – they have a divisor which is a number that helps base the current market cap to their base.

Of all the major indices in the world – I know of only the Dow that is a price weighted index. Rest of them are all free float market cap based indices.

Reply

bemoneyaware November 14, 2011 at 5:23 pm

An index can be calculated in various ways. Some of the ways are as follows:

Price Weighted index: Ex: Dow Jones Industrial Average,Nikkei 225
Market value weighted or capitalization-weighted: NASDAQ Composite, NASDAQ-100,
Free Float Market Capitalization Weighted: Sensex, Nifty-50, FTSE-100, CAC 40

SENSEX, first compiled in 1986, was calculated on a Market Capitalization-Weighted methodology of 30 component stocks representing large, well-established and financially sound companies across key sectors.Since September 1, 2003, SENSEX is being calculated on a free-float market capitalization methodology.

More on stock index can be read at Stock Market Index:The Basics

Reply

Ruchi November 10, 2011 at 4:13 pm

Very nice post. thanks. Now we know that which are the top most companies which have higher weight In index.how do we utilize this insight , does it mean , that senses fall or rise is dependent mostly on these top companies or is it vice versa. These companies share price fall or rise in correlation to sensex index. please clarify . Thanks .

Reply

Manshu November 10, 2011 at 8:02 pm

Thanks Ruchi.

You are right in observing that the movement in the Sensex will depend on the movements of the heavyweights in the Sensex and the day to day movement will very likely be dictated by biggies like Reliance, Infy or other stocks.

However, over a longer time frame, as one stock loses value, and the other gains in value – their relative importance will change and evolve to a point where one stock will no longer be that relevant to the index.

So, I think in the early 90’s ACC would have been a big Sensex mover, then later on HLL must have been important, at some point during the early 2000’s the IT companies must have had a lot more weight but as time progressed the balance changed.

To me, that’s the big takeaway, that while in the short run a few companies decide much of the movement, if you take a longer term view then the Sensex constituents show which sectors are performing well and are important to the economy and so on.

Reply

Rama Krishna November 12, 2011 at 10:33 am

Good details…appreciate your efforts for fine details.

Reply

Manshu November 12, 2011 at 8:24 pm

Thanks

Reply

ClickInsurance.co.in November 14, 2011 at 11:44 am

Hi Manshu, you have explained the concept very well. It also means that when the Sensex falls, it is not doomsday for all the sectors and vice versa. The sectoral indices give a better picture of how the industry is performing. Whereas, the Sensex can be a generic indicator of the economy as a whole, it is the sectoral indices that the investors should be spending more time on before investing.

Reply

Preeti November 24, 2011 at 1:08 pm

Hi,

Could you also explain how the weights are calculated?

Reply

Manshu November 24, 2011 at 8:39 pm

That’s explained in detail in the first part of this very article Preeti – please go through it again and I think you will notice it.

Reply

manna December 3, 2011 at 4:36 am

Thanks a lot for your informative article.
I have a question in my mind , please help me to get the answer.
If an investor wants to get the same return /loss as that of sensex, he/she has to make a portfolio of 30 shares in the proportion of
(a) no. of shares x free float adj factor
(b) free float market cap
(c) weights in index
(d) equal quantities of 30 scripts

Thanks in advance.

Reply

Manshu December 3, 2011 at 5:04 am

None of these.

It starts with free float x number of shares but then builds on that. I think you need to re-read the article or go over it a few times to understand the methodology and that’s what an investor has to do to replicate the return.

However, if you tell me why you want to do this I might be able to suggest something else to you.

Reply

bemoneyaware December 4, 2011 at 1:27 pm

Hello Manna,

Please correct me if I am wrong. If an investor wants the same return/loss as Sensex he can invest in Sensex ETFs. One mint article Sensex ETF and Index Funds List might help you.

Reply

manna December 6, 2011 at 11:51 pm

My objective is to earn same return as that of sensex .
Is it possible mathematically ?

Reply

Mayank Gupta December 13, 2011 at 12:47 am

Great work Manshu on providing us with the way to calculate Sensex. Also want to share that Sensex has delivered around 16-17% annualised returns since inception in 1979 and around 14% annualised returns in last one decade

Reply

Manshu December 13, 2011 at 2:00 am

Thanks Mayank – just curious what the source of that data is and is there any way to see this in a series from 1979 onwards? Thanks!

Reply

Meha December 29, 2011 at 10:15 am

Thanks for sharing an extemely informative article. Great work.

I have a query, guess u could help..if a stock has say 10% weightage in index, price being say 1000rs. Then how much will index fall if the stock plunges say 100rs?

Thanks in advance..

Reply

Manshu December 29, 2011 at 9:30 pm

It should be pretty dramatic – I’d say about 8% or so if none of the other components move.

Reply

Meha December 30, 2011 at 10:56 am

Thanks Manshu…but I am a little confused, how did u arrive at this 8%…can u pls explain

Thanks in advance

Reply

Manshu December 30, 2011 at 7:57 pm

As I said in the post, the weight changes every second as the price changes and in this case since the stock is going down it will have lesser weightage in the Sensex each passing second, so other things being equal I would expect the fall in the Sensex to be less than the fall in the stock. By how much? That is a guess keeping in mind that something with 10% is the biggest component and will still impact it quite a lot.

In reality you can’t calculate such a percentage because of the way the the Sensex is constructed.
To quote a relevant passage from the article:

“This is an important point, and is something that most people aren’t able to wrap their heads around in the first time. When you think about weight of a stock in the Sensex you think of it as a static value like Reliance has 12%, ICICI Bank has 7% and so on, but that is not true because the weight changes every second as the price changes. In this table I have highlighted two companies whose relative importance changed from one day to another in the Sensex.”

Also, I assumed that you were just curious about this but if you had any specific reason for knowing this then we might have to think about that reason and do this differently.

Reply

Daxesh February 10, 2012 at 2:27 am

Very informative article Manshu. I was trying to know this formula during my MBA, but could not figured out. So great work. thanks.

Question for you:
> company stock price is decided based on full market cap / total no of outstanding shares.
Now say for Reliance, price goes up => full market cap goes up => will this incr/decr free float adj factor? how come?
Basically I am not able to co-relate reliance weight in Sensex calculation & reliance stock price.

Thanks in anticipation of your reply.

Daxesh

Reply

Ashok Kumar February 14, 2012 at 8:53 am

Hi Manshu,

You have explained the concept very well.

Regards

Ashok Kumar

Reply

rahul March 6, 2012 at 11:07 pm

very very informative.Thank you.

Reply

Manshu March 7, 2012 at 6:11 am

You’re welcome!

Reply

siddiq April 30, 2012 at 3:57 am

how to calculate Base Market Capital

Reply

Uma May 4, 2012 at 9:40 pm

Hi,
Sincerely, a very informative & interesting post! Honestly, I was just going through basics of SENSEX for an interview tomorrow, this post just threw light on aspects I previously thought ‘boring’. It is written in a way that even a science student (like me) can understand & appreciate. Kudos ! :)

Reply

Ravi kumar June 13, 2012 at 3:04 pm

Hi manshu,
article was very informative Thanks alot…..

Regards,
Ravi kumar.

Reply

Pinkesh June 28, 2012 at 10:55 pm

Dear Manshu,

Thanks for your efforts which you have put to explain the hidden calculation to us.
It is really easily understandable.
But I am not getting how the Base market capitalization is being calculated?
I am waiting for your reply.
And thanks in advance..

Reply

Manshu July 1, 2012 at 8:28 pm

That was something that was calculated once in the beginning and doesn’t change. They have to decide on a base to see how things change later on and so the base remains static and doesn’t change at all.

Reply

Lokesh July 9, 2012 at 12:51 am

Thanx for wonderful article.
Few Points/queries
1. As base market cap is for the year 1978-79 and companies keeps getting changed.
So what if a company was not in existence in the base year then how would Base MktCap be calculated?
2. As weightage is based on free-float MktCap which in turn based on current share price so it basically an outcome of movement and doesn’t have impact on Sensex calculations.Right?

Reply

Manshu July 9, 2012 at 6:18 am

Lokesh – 1. Base market capital is fixed, that doesn’t change. What changes is the index value in relation to that and when they include a new company and replace an older one, they take care of that.

2. It does – it affects the index and in turn the index affects how much it weighs relative to the overall index. So, if a company with a big weight keeps falling then it will drag down, but with each successive fall its weight in the Sensex will reduce and the Sensex won’t fall as much with each successive drop.

Reply

Karan July 19, 2012 at 10:52 am

Veri informative post and comments also…
Thanks a lot Manshu…

Reply

sachin July 20, 2012 at 12:05 am

dear manshu ji,
i got all above things which i couldnt figured out even in my MBA. sincere thanx.
just one query,u said base market capital is fixed but how it was calculated in first place?
i tried hard to figure it out every where but failed.
can u? plzzzzz

Reply

abdu July 24, 2012 at 10:51 am

this article is very informative but i have doubt that while calculating index where is the application of wight. do we multiply wight with free float capitalization figure

Reply

Prabaharan July 26, 2012 at 12:16 pm

The method of calculating Base market capitalization(index divisor) and adjusting the changes can be had from this site :

http://www.bseindia.com/about/abindices/IdxCalcMt.asp

Reply

Manshu July 29, 2012 at 1:55 am

Thanks for sharing the link.

Reply

C.T.chandrakanth July 26, 2012 at 7:21 pm

Thak you for giving so much information

Reply

Manshu July 29, 2012 at 1:54 am

Thanks for your comment.

Reply

Nitesh Kadam August 14, 2012 at 1:17 pm

where is the sensex calculation on
Nov 4,2011?? Why didn’t u calculate even u’ve all data of that day.i didn’t get it

Reply

Ashok sharma September 2, 2012 at 11:23 pm

Hi, dear manshu, you have explained “HOW CALCULATE SENSEX”. -By a fentastic & simple way. At last i have understood about the calculation of sensex. Thank u very much.

Reply

Manshu September 9, 2012 at 5:02 am

Thanks for your comment!

Reply

anand October 9, 2012 at 10:04 pm

thankss manshu…

great job yrr….as i am a ca student so thinking of trying in stocks alsoo…u made my work easier by clearing the concepts behind trading of securities..

thank youuu…!!!!!

Reply

Suresh October 19, 2012 at 11:31 am

You have lucidly explained the fundamentals. Thank you. It will be great if you can also let us know how exactly is the base market capital computed rather than backworking it.

Thank you.

Reply

sam November 6, 2012 at 8:34 pm

This is one of the best and the simplest way of understanding the sensex points calculation. I’ve been searching for something like this in a long time. Thanks a ton for your efforts. Please post more such informative articles in the future.

Reply

Jatinder Singh November 25, 2012 at 4:39 pm

Thank you!
I have a question for you..

how does anyone company calculate the free float value, and how do they find the price of the per share?

thanks in advance

Reply

Manshu November 25, 2012 at 9:35 pm

Free float is the number of shares that are not held by promoters, and price per share is simply the price at which the share is trading in the market at that point in time.

Reply

Suresh Vr November 29, 2012 at 2:19 pm

Dear Manshu… Thanks for explaining precisely. I have a clarification, related to this but more like a next step to this… I was looking to calculate the present P/E ratio for sensex… While i would compute ‘P’ – value of sensex as mentioned above, i had problem in computing ‘E’ – the EPS pf sensex… [clarfn 1] shud we take trailing 12 months EPS of all sensex companies or EPS of last completed FY (eg FY 12); [clarfn 2] When i computed EPS of sensex companies for FY 12, it summed up to Rs 1,378 whereas many reports / websites state that the FY 12 EPS is 1,127 or 1,107. Whr am i doing mistake? [clarfn 3] while computing EPS, shud we take standalone EPS or consolidated EPS? [clarfn 4] Similarly, H1 FY 13 sensex EPS worked out to Rs 685, whereas consensus Sensex EPs estimates for FY 13 is only Rs 1,225. y?

Manshu, Awaiting your revert. Thanks in advance!!

Reply

Manshu November 29, 2012 at 5:41 pm

1. It really depends on what you’re trying to do and I’d imagine both methods are acceptable.

2. IF you send me a link with a report that says the EPS is this or that, I can take a look at that and see what they are doing and how they are calculating it.

3. You should take consolidated EPS as that reflects the total results a lot better than standalone.

4. You have taken just the first half, whereas the consensus is for the whole year and is almost twice so that sounds about right.

Reply

Manshu November 29, 2012 at 5:43 pm

1. It really depends on what you’re trying to do and I’d imagine both methods are acceptable.

2. IF you send me a link with a report that says the EPS is this or that, I can take a look at that and see what they are doing and how they are calculating it.

3. You should take consolidated EPS as that reflects the total results a lot better than standalone.

4. You have taken just the first half, whereas the consensus is for the whole year and is almost twice so that sounds about right.

Reply

Madhukar January 4, 2013 at 3:43 pm

It was awesum Thanks lot..
CAn you plz explain how is the base market capitalization calculated…

Reply

MADHUKAR January 4, 2013 at 4:00 pm

THANKS alot for the information …
BUt how is the base market capitalization calculatrd?

Reply

Khushboo February 16, 2013 at 8:12 pm

Thanks :)

Reply

R n v surya narayana March 24, 2013 at 11:58 am

nice

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Manshu March 26, 2013 at 6:06 am

Thanks!

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Arvind May 14, 2013 at 5:38 pm

http://www.bseindia.com/mktlive/indiceswatch_scripweight.asp?iname=BSE30&sensid=30&type=sens&total=2905259.98&mktcapteck=1443986.58&dateheader=Friday%2C+November+04%2C+2011
The above link provided by you is not working for me as whenever I am opening the above link, it lands at http://www.bseindia.com/markets/Equity/EQReports/MarketWatch.aspx?expandable=2

I just wanna know the free float market cap of 30 companies of some past dates but the link provided by u isn’t provided. Pls help asap!

Your article deserves 10,000 stars cuz it helped me like hell. Just provide me a correct link from where I can take 30 companies free float market cap of any historical 4-5 days .

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Pravin May 15, 2013 at 10:48 pm

Thank u very much to explain the concept of sensex in details. It will be great to know about how to calculate or take into consideration the base market cap of 1978-79 in details of 100 sensex points.

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Vipul Gupta June 1, 2013 at 9:28 am

Hi Manshu
Great work indeed.

I love to see and watch all these happenings in D-street.
I have a doubt, how base capital is calculated?, how have you calculated?
Another thing what is the deciding factor for a compn=any to come in top 30 for index?

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naveen kumar June 15, 2013 at 10:17 pm

thanks for giving this valuable information.can please send me ur mail id please

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Rahul Walame June 29, 2013 at 4:25 pm

Kindly tell me how did u calculate base market capital.i.e8291 crores

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Manshu June 30, 2013 at 8:49 am

This is the mcap of the companies nin the index at that time.

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dalchand agrawal July 16, 2013 at 12:29 pm

Thank you!

There can not be more simpler explanation than yours for calculating Sensex. Anybody can understand it. But, I have a query regarding base market capitalization, You have mentioned that it was fixed way back in time. Where do I find from, about the particular companies, whose values were included for calculation, what are the current status of these companies. Why is same data still being followed and the most important, how was it calculated?

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Manshu July 16, 2013 at 8:11 pm

Thank you – it was calculated at the time using the market value of the entire share market and calling it a base of 100. Further to that they kept readjusting it for events, so in that sense the same absolute value is not being followed but there is continuity in it because the base is being adjusted so that it is useful to know that if the Sensex is 20,000 and then 40,000 in 5 years we can say that the market doubled in 5 years.

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krishna August 3, 2013 at 9:13 am

nice effort..but let me know that how did you assign the free float factor to the respective companies? as per the table also, the values must be different…

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Satish August 25, 2013 at 6:35 pm

Thanks Manshu for providing the valuable information on Index value calculation. It was really great help me to understand the concept.

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Gaurav September 6, 2013 at 3:30 pm

Hi Manshu,

Thanks for the wonderful sharing. It helped us in understanding how Sensex is calculated. I understood everything except base market capital. Can you please explain, how is it calculated.??

Regards,
Gaurav.

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Mihir November 22, 2013 at 1:25 pm

If i want to calculate the base market capitalisation as on today, how would i go about it? You said in nov 2011 it was 8291. so what would it be today? would i be required to adjust for stock splits or new shares issued during this time?

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Pushkar Chaudhary January 30, 2014 at 11:39 am

Thanks a lot Manshu!
You really made it quite easy.

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avnsh June 9, 2014 at 3:48 pm

is close price same as the last price of that particular company for that day , or the avg. of the prices in the last 30 mints for the day ?

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avnsh June 9, 2014 at 4:26 pm

is close price same as the last price of that particular company for that day , or the avg. of the prices in the last 30 mints for the day ? ..

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burgiman July 12, 2014 at 11:58 am

The sensex meanings can easily understand by this way… so it will help for us…..

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Bimal July 21, 2014 at 11:24 pm

Thanks a lot Manshu!
You really made it quite easy.

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