BSE to shift BSE-100 to free float

The BSE announced that it is shifting the BSE-100 index to the 'free-float methodology' with effect from April 5.

This marks a major migration of the BSE's broad-based index to the free-float methodology, after the BSE started its technology (BSE TECk) index in July 2001 and bank (Bankex) index in June 2003 on the free-float platform.

Subsequently, it had migrated the Sensex to free-float methodology from September 1, 2003. The BSE-100, thus, will be the fourth index to be quoted on the free-float platform.

"The shifting of BSE-100 to the free-float method will greatly enhance the quality of the index and bring it at par with international standards," the BSE said in a release yesterday.

The BSE-100 weighted on free-float basis would authentically reflect the investment opportunity of the constituent stocks thereby making the index a more reliable benchmark for the broad market performance, the release added.

A free-float method takes into account only the capitalisation of stock not locked up with the promoters, and therefore, available for trading, whereas a full-float methodology makes no distinction between fully paid-up stock and volumes of stock actually available for trading.