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March 11, 2000
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Towards a clearer indexAravamuthan Sasikant Four new stocks would now be included in the Sensex with effect from April 1, 2000. IDBI, Indian Hotels, Tata Power and Tata Chemicals are out. Finding their way into the Sensex for the first time are Satyam Computer, Zee Telefilms, Reliance Petroleum and Dr Reddy's. The replacement is very significant. Consider this: the combined market capitalisation -- as on March 10, 2000 -- of the four outgoing companies is about Rs 80 billion, whereas the market capitalisation of the four new entrants stands at a whopping Rs 1,070 billion. The total market capitalisation of the Bombay Stock Exchange is Rs 10,025.95 billion. The new additions ensure that the BSE Sensex has become a much more representative sample. The outgoing stocks account for a mere 0.8 per cent of the BSE's total market capitalisation. The new entrants, however, account for more than 10 per cent of the BSE's market capitalisation. The Sensex, in its new avatar, will be a more representative sample of the market as it will now account for more than 40 per cent of the total market capitalisation of the Bombay Stock Exchange. Satyam Computer has a market capitalisation of Rs 345 billion (Rs 34,500 crore), followed by Zee Telefilms with Rs 488 billion (Rs 48,800) crore, Reliance Petroleum with over Rs 200 billion (Rs 20,000 crore), and Dr Reddy's Laboratories with more than Rs 34 billion (Rs 3,400 crore). The addition of Zee Telefilms had become necessary, as the Sensex did not have a representative from the entertainment sector. Satyam Computer's entry was essential as Infosys and NIIT together were not exactly the proper representative of the infotech sector. The addition of Reliance Petroleum -- Asia's largest grassroots refinery, seemed inevitable due to its sheer size. The new additions Satyam Computer and Zee Telefilms will ensure that the volatility in the Sensex due to Infosys Technologies or HLL is reduced to a great extent.
Market cap figures are as on March 10, 2000 |
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