Stock Market In India- Group 1

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Stock Exchanges In India

 Stock Exchanges are an organized marketplace, either corporation or mutual  organization, where members of the organisation gather to trade company stocks and other securities  . The members may act either as agents for their customers, or as principals for their own accounts. Stock exchanges also facilitate for the issue and redemption of securities and other financial instruments including the payment of income and dividends.

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List of Stock Exchanges In India Bombay Stock Exchange National Stock Exchange Regional Stock Exchanges  Ahmedabad Stock Exchange  Bangalore Stock Exchange  Bhubaneshwar Stock Exchange  Calcutta Stock Exchange  Cochin Stock Exchange  Coimbatore Stock Exchange  Delhi Stock Exchange  Guwahati Stock Exchange  Hyderabad Stock Exchange

STOCK EXCHANGE ,INTRO  Jaipur Stock Exchange  Ludhiana Stock Exchange  Madhya Pradesh Stock Exchange  Madras Stock Exchange  Magadh Stock Exchange  Mangalore Stock Exchange  Meerut Stock Exchange  OTC Exchange Of India  Pune Stock Exchange  Saurashtra Kutch Stock Exchange  Uttar Pradesh Stock Exchange  Vadodara Stock Exchange

STOCK EXCHANGE,INTRO .  SENSEX: SENSITIVITY INDEX Sensex is index of BSE. It has got 30 listed companies.  NIFTY: NATIONAL FIFTY and it is the index of NSE. It has got 50 listed companies

STOCK EXCHANGE IN INDIA.  NSE recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993

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STOCK EXCHANGE IN INDIA. Cont..

Promoters

 NSE has been promoted by leading financial institutions, banks, insurance companies and other financial intermediaries:  Industrial Development Bank of India Limited  Industrial Finance Corporation of India Limited  Life Insurance Corporation of India  State Bank of India  ICICI Bank Limited  IL & FS Trust Company Limited  Stock Holding Corporation of India Limited  SBI Capital Markets Limited  Bank of Baroda  Canara Bank  General Insurance Corporation of India  National Insurance Company Limited  The New India Assurance Company Limited  The Oriental Insurance Company Limited  United India Insurance Company Limited  Punjab National Bank  Oriental Bank of Commerce  Indian Bank  Union Bank of India  Infrastructure Development Finance Company Ltd.

NSE S&P CNX NIFTY INDEX. The NSE S&P CNX Nifty 50 index is a well diversified 50 stock index accounting for 24 sectors of the economy It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds.  owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL.

NSE Nifty Junior Index The next rung of liquid securities after S&P CNX Nifty is the CNX Nifty Junior index. The maintenance of the S&P CNX Nifty and the CNX Nifty Junior are synchronized so that the two indexes will always be disjoint sets

NSE CNX 100 Index  CNX 100 index is a combination of the S&P CNX Nifty and CNX Nifty Junior.  Any changes i.e. inclusion and exclusion of securities in S&P CNX Nifty and CNX Nifty Junior would be automatically mirrored in this new index.  The CNX 100 Index has a base date of Jan 1, 2003 value of 1000

BSE ,SENSEX The Sensex is supposed to be an indicator of the stocks in the BSE Sensex is calculated taking into consideration stock prices of 30 different BSE listed companies. It is calculated using the “free-float market capitalization” method

Indian Stock Market. Cont.. Market Capitalization = Current Price * Number of shares issued by the company.  Free float factor* Market Capitalization =Free Float Market Capitalization.

METHOD Of CALCULATION  First: Find out the “free-float market cap” of all the 30 companies that make up the Sensex! Second: Add all the “free-float market cap’s” of all the 30 companies! Third: Make all this relative to the Sensex base. The value you get is the Sensex value! Suppose, for a “free-float market cap” of Rs.100,000 Cr... the Sensex value is 4000…  Then, for a “free-float market cap” of Rs.150,000 Cr... the Sensex value will be..

METHOD Of CALCULATION 100000 /4000 =150000/? =150000/100000*4000 • So, the Sensex value will be 6000 if the “free-float market cap” comes to Rs.150,000 Cr!

METHOD Of CALCULATION So, the Sensex value will be 6000 if the “free-float market cap” comes to Rs.150,000 Cr! Please Note: Every time one of the 30 companies has a “stock split” or a "bonus" etc. appropriate changes are made in the “market cap” calculations.

Indian Stock Market. Cont..  According the BSE, any shares that DO NOT fall under the following criteria, can be considered to be open market shares:  Holdings by founders/directors/ acquirers which has control element  Holdings by persons/ bodies with "controlling interest"  Government holding as promoter/acquirer  Holdings through the FDI Route  Strategic stakes by private corporate bodies/ individuals  Equity held by associate/group companies (cross-holdings)  Equity held by employee welfare trusts  Locked-in shares and shares which would not be sold in the open market in normal course.

BSE, SENSEX cont.. The 30 companies that make up the Sensex are selected and reviewed from time to time by an “index committee”. This “index committee” is made up of academicians, mutual fund managers, finance journalists, independent governing board members and other participants in the financial markets.

BSE, SENSEX Cont..

• The main criteria for selecting the 30 stocks is as follows:  Market capitalization: The company should have a market capitalization in the Top 100 market capitalization’s of the BSE. Also the market capitalization of each company should be more than 0.5% of the total market capitalization of the Index.  Trading frequency: The company to be included should have been traded on each and every trading day for the last one year. Exceptions can be made for extreme reasons like share suspension etc.

BSE, SENSEX Cont.. * Number of trades: The scrip should be among the top 150 companies listed by average number of trades per day for the last one year. * Industry representation: The companies should be leaders in their industry group. * Listed history: The companies should have a listing history of at least one year on BSE. * Track record: In the opinion of the index committee, the company should have an acceptable track record.

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