BSE Guidelines for selection of ‘A’ Group Companies...!

BSE reviews list of stocks in ‘A’ Group periodically. It is done bi - annually.

Present criteria for Group ‘A’ stocks considers market capitalization and liquidity of securities.

Presently 200 companies are eligible to be included in ‘A’ Group.

Number of listed companies on BSE has increased from 4732 in March 2004 to 5458 in August 2014.

The average number of daily traded stocks on BSE has also increased over a period and presently about 3000 companies are traded daily. So the Executive Management Committee has decided to include 300 companies into ‘A’ Group.

(A) Company Selection Criteria for Analysis –

(i). Companies classified under group ‘A’ & ‘B’ group shall be considered for the purpose of review. Further, companies traded under permitted category at BSE, listed mutual funds and scrips traded under physical mode shall be kept out of the ambit of classification in Group ‘A’.

(ii). Company must have been listed for minimum period of 3 months. However, exception to this criterion would be granted to:

(a). A company, which is permitted for trading in F&O segment from date of its listing

(b). A company listed subsequent to any corporate action involving scheme of arrangement for merger/ demerger/ capital restructuring etc.

(iii). Companies traded for minimum 98% of the trading days in last quarter shall be considered eligible.

(iv). The list of companies is further screened for investigation & compliance by Dept. of Surveillance & Supervision (DOSS). The companies with negative investigation observation are considered ineligible for this review.

(v). While selecting top 300 companies in Group ‘A’, following hierarchy shall be followed:

(a). Companies with the final rank within top 300 continuously for preceding three rolling quarters shall be included.

(b). In case, a list derived from v (a) above, comprises of less than 300 companies, the companies with final rank within top 300 in preceding two rolling quarters shall be included.

(c). In case, a list derived from v (a) and v (b) above, comprises of less than 300 companies, the companies with final rank within top 300 in the current quarter shall be included.

(d). ‘A’ Group company which is not included in the final 300 companies but is a part of S&P BSE 500, will continue to be in the ‘A’ Group.

B) Scoring Mechanism for Group ‘A’ Companies..!

(1) Last quarter average free float Market Capitalisation of the company (50%)

(2) Last quarter average Turnover of the company (25%)

(3) Corporate Governance (10%) (Source of Information – Latest Annual Report Submitted by the company)

(4) Compliance Monitoring (10%)

(5) Responsible/Sustainable Investment (Source of Information – Latest Annual Report Submitted by the company and Company Website) (5%)

For More Details

Yatin Padia

E- mail Id : yatin.padia@bseindia.com

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