BSE introduced the new index series - BSE IPO index to track the current primary market conditions in the Indian capital market and measure the growth in investor's wealth within a period of two years after listing of a company subsequent to successful completion of initial public offering (IPO).
Robust growth of the Indian economy, 6.7% in 2008-09, and the expectation of higher growth in the future are expected to boost the primary market. For this and other reasons, it was an appropriate time to introduce to the market an indicator that will track primary market conditions in the Indian capital market.
BSE on August 24, 2009 announced the launch of BSE IPO index to track the value of companies for two years after listing subsequent to successful completion of their initial public offering (IPO).
BSE continued to introduce index innovations with the launch of the IPO index, by introducing ceiling (capping) on weightings of index constituents. Market capitalisation weightings of index constituents is limited to 20%. If a constituent�s market capitalization results in a higher weighting, the company�s weight is suitably adjusted to ensure that all constituents are restricted to 20% in the index. However, between any rebalancing, weightage of any index constituent can exceed 20%.
Source : BSE