People love to invest their money in profit-making ventures. They want to put their savings into the economy with the motive to earn money. People usually purchase the shares of different companies. The movement in the number of shares is noted by Sensex. Sensex is a stock market of the Bombay stock exchange. Companies register themselves under the Bombay stock exchange. This stock exchange market works freely and depends on demand and supply factors.
Sensex is widely accepted and recognized as a measure that shows market movements. A lot of people invest their money in companies and check Sensex every day and find out the position of the company. Bombay stock exchange comprises the leading and top companies of every sector. The sale and purchase of most of the money regularly happen in Sensex. People purchase or sell shares of the company based on market movement. You can get all the information regarding the Sensex movement on SENSEX TODAY.
For getting your company considered in Sensex you need to follow a few points. These points are listed below:
- You should compulsorily register your company on the Bombay stock exchange. If your company is not listed under the Bombay stock exchange then it will not be included in Sensex too.
- Your company should be financially stable. Large-sale companies and medium-scale companies are only included in Sensex. Sensex only includes the best and top companies. You should make your company in that position that gets listed in Sensex.
- Companies should have a high liquidity ratio for getting registered on the Bombay stock exchange. It is easy to sell and purchase shares in the market if a company has a high liquidity ratio. It shows the quality of business.
- Sensex maintains the balance between all the sectors. Every sector has a fixed weight designed by Sensex. Companies should follow this weightage criterion. The financial sector mainly consists of the most weightage.
These are the four vital components that you should know. When the company follows all these points then they get considered in Sensex.
How Sensex is Calculated?
This is one of the rapidly asked questions by the people. People often get confused by the way Sensex is calculated. Let’s study in detail the calculation of Sensex.
Initially, Sensex was calculated based on full market capitalization but subsequently, shifted to free-float market capitalization. Free- float is the portion of the shares that a company is willing to trade to the general public. It doesn’t include the shares that are held by the government or any other organization.
Market Capitalization is the value of the company. It is determined by multiplying the price of the shares with the total number of shares issued.
The formula used for the calculation of free-float market capitalization is
Free Float Market Capitalization = Market Capitalization × Free Float Factor
The formula for calculating Sensex is
Sensex = (total free float market capitalization/ base market capitalization)×100
This is the basic information regarding what is Sensex and how it is calculated. You can buy shares on an online platform on 5 PAISA.