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Towards a clearer index

Aravamuthan 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.

OLD SENSEX STOCKS	MKT. CAP. (in Rs crs.)	NEW SENSEX STOCKS	MKT. CAP. (in Rs crs.)
INFOSYS	77468.80	INFOSYS	77468.80
HIND.LEVER	52470.48	HIND.LEVER	52470.48
ITC	21852.19	ZEE TELEFILMS	48810.40
RELIANCE	20519.31	SATYAM COMPUTERS	34440.00
MTNL	20160.00	ITC	21852.19
ICICI	11850.74	RELIANCE	20519.31
NIIT	9661.91	RELIANCE PETROLEUM	20271.25
SBI	9009.82	MTNL	20160.00
RANBAXY	7976.16	ICICI	11850.74
LARSEN & TOUBRO	6826.14	NIIT	9661.91
HINDALCO	4766.21	SBI	9009.82
IDBI	3964.51	RANBAXY	7976.16
CASTROL	3890.36	LARSEN & TOUBRO	6826.14
HPCL	3868.36	HINDALCO	4766.21
MAH & MAH	3736.39	CASTROL	3890.36
BSES	3637.09	HPCL	3868.36
GUJ.AMBUJA	3564.71	MAH & MAH	3736.39
BAJAJ AUTO	3486.21	BSES	3637.09
TISCO	3388.93	GUJ.AMBUJA	3564.71
NESTLE	3331.64	BAJAJ AUTO	3486.21
TELCO	3314.34	Dr.REDDY'S LABORATORIES	3422.51
GRASIM	3208.43	TISCO	3388.93
BHEL	3059.50	NESTLE	3331.64
GLAXO	2689.88	TELCO	3314.34
NOVARTIS	2548.93	GRASIM	3208.43
ACC	2263.70	BHEL	3059.50
INDIAN HOTEL	1240.66	NOVARTIS	2548.93
TATA POWER	796.40	ACC	2263.70
TATA CHEM	783.44	COLGATE	1924.30
Sensex mkt. cap. (in Rs crs.)	297259.54		397418.70
Total BSE mkt. cap. (in Rs crs.)	1002595		1002595
Sensex as % of total BSE mkt. cap.	29.65		39.64

 Market cap figures are as on March 10, 2000

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