Listing means admission of securities to dealings on a recognised stock exchange.

The
securities may be of any public limited company, Central or State Government, quasi
governmental and other financial institutions/corporations, municipalities, etc.

The objective of listing are mainly to :

. provied liquidity to securities

. mobilize savings for economic development;

. protect interest of investors by ensuring full disclosures..

Nifty indicates NSE; it is the leading index for large companies in the National Stock
Exchange of India. It consists of 50 companies representing 24 sectors of the economy.
NIFTY represents approximately 47% of the traded value of all stocks on the National
Stock Exchange.It is calculated using base year 1995 and base index value 1000

SENS
EX Sensex stands for “sensitive index”, it represents BSE (Bombay Stock Exchange).
Sensex indicates all major companies of BSE. Sensex is calculated using share prices of
30 major companies which are listed in BSE. If the Sensex goes up it means that share
values of most of the major companies have gone up and vice versa

Sensex calculation is practiced since 1986. Initially it had been calculated using total
market capitalization method but the methodology changed to free float market
capitalization since from 2003. Hence these days Sensex is calculated using free float
market capitalization of 30 major BSE listed companies and by using base value 100
(1978-79). SENSEX is calculated for every 15 seconds.

Calculation of the free float factors

Periodically, every listed company has to submit holdings information i.e. who all are
holding the shares of the company, to the exchange. Based on this free float factor for
each company is calculated.

Free float factor = No of shares available for trading in the open market / Total No of
outstanding shares of the company
free float factor of each company has to be rounded of to the higher multiple of 5 and
company is considered among one of the free float range

BSE

Index Calculation

BSE Sensex (or Sensitive Index) is the prime and older indicator of stock market trend in
India (the other being the Nifty Fifty). It consists of 30 stocks representing a wide cross-
section of industries. It is calculated using a well attested method called free float market
capitalization.

What is Free Float Market Capitalization?

Simply put its the market capitalization of all shares in "free float!!!" Free float shares are
those that are available for trading in the open market. They rest may be FDI holdings,
promoter holdings, locked in shares, strategic stakes, ESOPs etc. Suppose 40% of all
shares is openly available. A free float factor is decided by BSE which would be 0.4
(anything in the band of above 35% -40% would have this factor). This factor is
multiplied with the total market capitalization of the company (which is the prevailing
share price * total no. of shares issued by the company) to get the free float market
capitalization.

How to Calculate Sensex

You know how to find the free float market cap of a company. Now add these for all the
30 companies that constitute the Sensex. You have the total free float market
capitalization for the Sensex. The Sensex value is this value relative to a base period. The
Base period is 1978-79 and the Base value is 100. The Free-float market Cap is divided
by a number called the index divisor to arrive at the right value of Sensex. This divisor
factors in changes in scrips, dividend paid, etc right from the base period. A simple way
to find the current index divisor would be calculating the previous day's free-float market
cap / previous day's sensex.

Here's an example to calculate the sensex

Free Float Market cap (prev day) = 320000 cr

Sensex Value = 16000
Div = 320000 / 16000 = 20

Current Free Float Market Cap = 336000

Current Sensex Value = 336000/20 = 16800

345000
16800

20.53