As part of its agenda to reform the Public Sector Enterprises (PSE), the Government has selectively been disinvesting its holdings in public sector enterprises since 1991. With a view to provide regulators, investors and market intermediaries with an appropriate benchmark that captures the performance of this segment of the market, as well as to make available an appropriate basis for pricing forthcoming issues of PSEs, IISL has developed the CNX PSE Index, comprising of 20 PSE stocks.

Methodology

The index is computed using free float market capitalization method having a base period of December, 1994 indexed to a base value of 1000 wherein the level of the index reflects total free float market value of all the stocks in the index relative to a particular base market capitalization value. The method also takes into account constituent changes in the index and importantly corporate actions such as stock splits, rights, new issue of shares etc. without affecting the index value. The CNX PSE Index was computed using market capitalisation weighted method from the launch date till October 8, 2010.


Market Representation

1. CNX PSE Index represent about 8.52% of the to free float market capitalization of the stock listed on NSE as on December 30, 2011.
   
   

2. The total traded value for the last six months of all index constituents is approximately 7.02% of the traded value of all stocks on NSE as on December 30, 2011.

Selection Criteria

Selection of the index set is based on the following criteria :

1. Companies must rank within the top 500 companies by average free-float market capitalisation and aggregate turnover for the last six months.
   
   
2. Companies must have 51% of their outstanding share capital held by the Central Government and/or State Government, directly or indirectly. (Do not consider companies forming part of Banking & Financial Services sector)
   
   
3. The company's trading frequency should be at least 90% in the last 6 months.
   
   
4. The company should have reported a positive net worth.
   
   
5. The company should have a listing history of 6 months. A company which comes out with an IPO will be eligible for inclusion in the index, if it fulfills the normal eligibility criteria for the index for a 3 month period instead of a 6 month period.
    
6. Final selection of 20 companies shall be done based on the free-float market capitalization of the companies.
    
7. The review will take place on a semi-annual basis.
   
   

*CNX PSE Index was computed using market capitalization weighted method from the launch date till October 08, 2010.

List of CNX PSE Index Stocks