On August 9, 1999, Bombay Stock Exchange constructed a new index, namely, BSE-500, consisting of 500 scrips in its basket. BSE-500 index represents nearly 93% of the total market capitalisation on Bombay Stock Exchange Limited.
BSE 500 represents all 20 major industries of the economy. It reflects
the changing pattern of the economy and that of the market. The BSE-500
index was initially calculated on a full market capitalization
methodology. Since August 16, 2005, the index is computed on a
free-float methodology in line with sensex.
Year 1998-99 has been chosen as the base year, and February 1, 1999 has
been selected as the base date for its proximity to the current period.
The base value has been fixed at 1000 points in order to keep the index
comparable with other similar indices.
Scrip Selection Criteria for BSE 500 Index
Trading Frequency: The scrip should have been traded for at
least 75% of the trading days in the last three months. There can be
exceptions in case of extreme reasons like scrip suspension etc.
Final Rank: The scrip should rank among the top 750 companies
listed by final rank. For the purpose of calculation of final rank, 75%
weightage is assigned to the rank obtained on the basis of three-month
average full market capitalization and 25% weightage to the liquidity
rank based on three-month average daily turnover & three-month
average impact cost.
Industry/Sector Representation: Scrip is generally selected
taking into account a balanced sectoral representation of the listed
companies in the BSE.
Track Record: The company should have an acceptable track