The makeover of Sensex

Only seven companies survive from the original list

It is a truism that equities offer higher long-term returns than other financial assets. This is certainly the case with the Sensex, or the BSE Sensitive Index. Over the 40 years that the Sensex has, sort of, been in existence, it has delivered compounded capital gains of about 16 per cent per annum, along with 1.5 per cent in annual dividends. That beats inflation comfortably. The Sensex was actually launched in 1986. The BSE compiled it as a ready reckoner to track the combined share prices of the 30 largest listed companies in India. The methodology was adopted from the